Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Select Committee on Procedure (Report)

Mr. A. J. Beith: On a point of order, Mr. Speaker. I am not complaining about the change of business of the House. Indeed, I welcome the action of the Government Chief Whip who, in response to our efforts last night, has kindly put on the business about the membership of Committees at a time that is convenient to the House, and when it will attract wider public interest.
I wish to raise a different matter. You will know, Mr. Speaker, that there has been reported to the House the first report in this Parliament of the Select Committee on Procedure. I understand that it will soon be available to hon. Members in the Vote Office. It is concerned with short speeches, but contains within it a report of the proceedings of the Committee, and it is to that that I wish to draw your attention.
The report shows a Division in the Committee, as a result of which the Committee decided that it would not proceed to discuss the matter of Opposition time, and that the next sitting of the Committee would discuss public Bill procedure, a matter of major importance. On 3 April 1984 you, Mr. Speaker, responded as reported in column 819 of the Official Report, to some comments from my right hon. Friend the leader of the Liberal party, by saying that he had made "a wise suggestion". You were referring to the suggestion that the Select Committee on Procedure should look into the business of the allocation of Opposition time.
In doing that, Mr. Speaker, you were in tune with the words used on a number of occasions by the Leader of the House, who is in his place, who has said several times that

the appropriate course for us to follow in seeking to raise our grievance that we do not have a fair share of Opposition time is through the Select Committee on Procedure. I raise this matter with you now, the Committee having effectively decided that there will be no serious discussion of this matter at least until well into next Session. What alternatives are available to right hon. and hon. Members who feel as we do that we have to pursue other matters on the Floor of the House to ventilate a grievance that we and you, Mr. Speaker, thought could be properly dealt with by the Select Committee on Procedure?.

Mr. Speaker: I have not received the report and it is not in my hands. As to what matters the Select Committee on Procedure discusses and what decisions it comes to, that concerns its members, not me.
Later—.

Mr. David Steel: On a point of order, Mr. Speaker. You told the House a few moments ago that you had not yet received a copy of the report of the Select Committee on Procedure. That is true of all hon. Members. Can we take that to mean that after you have read the report you may have something further to say to the House on this matter?.

Mr. Speaker: I will have nothing further to add to what I have already said, which is that the Committee's conclusions are a matter for it and not for me.

Mr. Steel: Further to that point of order, Mr. Speaker. You told the House that it would be wise for the Select Committee to pursue this matter, and I agree that an expression of your wisdom is not a ruling that binds the Select Committee. The difficulty is that if the Select Committee ignores your wisdom and the usual channels refuse to discuss the matter, 'we are left with no recourse but to continue to make our protests on the Floor of the House, which holds up business. Is it not possible to ask that either the usual channels or the Select Committee listen to the wise words of the Chair?.

Mr. Speaker: The right hon. Member may accept that much of what I think to be wise is disregarded by the House. The remedy is in the hands of the House. It is up to the House to debate the Select Committee's report. That is a matter for the usual channels and not for me.

PETITION

GLC (Housing)

Mr. Ian Mikardo: I beg leave to present the humble petition of the committee of the Medway residents association in Bow, which showeth that the instructions given by your honourable House to the Committee on the Greater London Council (Money) (No. 2) Bill may result in large cuts in the GLC's housing improvement programme: That the experience of our area has demonstrated the great benefits brought by this programme: That as a result of the proposed amendment, the General Improvement Area status for this and many other parts of London is threatened: That Environment Improvement Grants are also threatened: That the withdrawal of these funds may undo much of the good work that has already been done: That this work has been very effective in improving the housing stock, living conditions and general environment in inner city areas like our own, and that the Government have often expressed their commitment to such improvement: that these improvements would never have been achieved without the assistance of the GLC.
Wherefore your petitioners pray that your honourable House will amend the Greater London Council (Money) (No. 2) Bill at the earliest opportunity to ensure that the threat to GLC housing improvement programme is removed so that the progress already achieved can be consolidated.
Your petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Select Committees (Membership)

Mr. Marcus Fox: I beg to move,
That Mr. Lewis Carter-Jones be discharged from the Trade and Industry Committee and Mr. Bernard Conlan be added to the Committee..

The Speaker: With this it will be convenient to take the following motions:
That Mr. Michael McNair-Wilson be discharged from the Education, Science and Arts Committee and Mr. Roger Sims be added to the Committee.
That Sir Reginald Eyre be discharged from the Environment Committee and Mr. Julian Critchley be added to the Committee.
That Mr. Mark Robinson be discharged from the Foreign Affairs Committee and Mr. Robert Harvey be added to the Committee.
That Mr. Michael Lord be discharged from the Agriculture Committee and Mr. Jim Spicer be added to the Committee.
That Mr. Robert Harvey be discharged from the Committee on Welsh Affairs and Mr. Keith Best be added to the Committee.
I have selected the amendment in the name of the hon. Member for Berwick-upon-Tweed (Mr. Beith) relating to the motion on the Committee on Welsh Affairs.

Mr. Fox: There were occasions over the last few weeks when I thought that this moment would never come. The travails of last night did not encourage me either. I congratulate Liberal and SDP Members on their good humour last night. If that is the consequence of their annual dinner, I recommend that they have one every week.
First, I pay tribute to my predecessor, my hon. Friend the Member for Gedling (Sir P. Holland), who for nine years in opposition and in government carried out the task that I now perform. He did the House a great service and I am sure that all hon. Members would like to show their appreciation. [Hon. Members: "Hear, hear."] On 26 October 1979 my predecessor as chairman of the Committee of Selection, in an early debate on the appointment of Select Committees said:
I knew we were on a hiding to nothing, and so it turned out.
He referred to the House's decision to entrust the nominations to Select Committees to the Committee of Selection. I can only echo his sentiments.
The fundamental problem that brings us here today is that, given a finite number of Select Committee places, not every hon. Member can be on a Select Committee of his or her choice or, indeed, on a Select Committee at all. Earlier in this Parliament the Government eased the problem temporarily by increasing the number of places on Select Committees. The Leader of the House gave his reasons for that move, contrary to the advice of the Liaison Committee, which sought to have fewer Members on Select Committees, not more. It was hoped that increasing the number from four to between nine and 11, would ease the anguish of minor Opposition parties.

Mr. Paddy Ashdown: Minor? Twenty-five per cent?.

Mr. Fox: The hon. Gentleman talks about 25 per cent., but I am talking about 44 hon. Members who are involved in six or seven minor Opposition parties. [Interruption.] As far as I am aware I have no instructions to take account of proportional representation when I perform my duties.
My point is that, having given a little to Liberal and SDP Members, it seems discourteous of them to disrupt the work of the Committee of Selection and to seek to deprive Select Committees of their full number to do the


work which they are set up to do. The nominations made to the House by the Committee of Selection are only nominations. They can be and have been overturned by the House. That is its right.
I shall explain briefly how the Committee of Selection arrives at its nominations. The House has given the Committee virtually no guidance as to how it should allocate places on Select Committees. In self-defence it has adopted Standing Order No. 65, which relates to the appointment of Select Committees and states that the Committee of Selection
shall have regard to the qualifications of those Members nominated and to the composition of the House.
The Committee of Selection has further resolved not to appoint members of the Government, parliamentary private secretaries or official Opposition Front Bench spokesmen.
To arrive at the total number of hon. Members which each Committee should have while reflecting the composition of the House, the Committee has taken the total number of places on Select Committees, ascertained the proportion of members of each party in the House and applied it to the smaller number. For the purposes of that exercise, the smaller Opposition parties have been treated as one group. When the total entitlement of each party or party group has been worked out, it is left to the Opposition parties to negotiate between themselves as to which Committee should contain representatives of which smaller parties.

Mr. Cyril Smith: The hon. Gentleman said that it was for the smaller parties to "negotiate". Does "negotiate" mean to be told or to negotiate?

Mr. Fox: That is not a matter for the Chairman of the Committee of Selection. It seems to me that the hon. Members who represent the Labour and Liberal parties on the Committee of Selection get on extremely well. I would have thought that negotiations took place in a friendly way. It has never been brought to my attention during meetings that there is discord, but obviously Liberal Members have a more personal knowledge of that than I have.

Mr. Smith: Am I right to infer from the hon. Gentleman's last comment that if it were brought to his attention that there was discord, he, as Chairman, would be prepared to intervene and try to do something about it?.

Mr. Fox: The hon. Gentleman who comes from the North, as I do, shows the common sense for which we are rightly famous. I shall deal with that very point further on in my speech.
The Committee of Selection adjudicates between conflicting claims within one party or group to a place on a Select Committee if necessary. It was on that basis that the Committee of Selection nominated a member of the SDP to the Defence Committee, but that nomination was overturned by the House. If the SDP is unrepresented on Select Committees today, that is not the fault of the Committee of Selection.
The representation of the smaller Opposition parties on Select Committees depends to some extent on their flexibility. If a party is willing to serve on a variety of Committees, it is more likely to have a larger representation than if it is interested only in a limited selection.
One Select Committee has two hon. Members from the smaller parties. That was not the Committee of Selection's original idea, but it was done by agreement and without infringing the principle that the Government should and must have a majority on each Committee. There is no reason why such a disposition should not be made within the guidelines that the Committee of Selection has set itself.
I understand that it will be argued today, as it has been argued before, that the Scottish and Welsh Affairs Committees should be composed so as to reflect the balance of parties in those regions rather than that in the House as a whole. I can only repeat what my predecessor said, which is that Parliament is a United Kingdom Parliament. In the absence of instructions from the House to the contrary, the Committee is unwilling to abandon its practice of appointing Committees that reflect the balance of parties in the House.
On at least one previous occasion the House overruled the Committee of Selection. If it chooses to do so again, that is its right. If it chooses to give the Committee of Selection more specific instructions as to how to nominate to Select Committees than it has so far done, I should not be averse to that development. The Committee of Selection is set up to carry out the wishes of the House.
Finally, failing any instructions, the Liberal-SDP amendment that affects the Welsh Affairs Select Committee is designed to ignore the balance of the House and to take a Conservative place that is not on offer. The House must resist such tactics. I hope that, after this debate, the vacancies can be filled and that the Select Committees involved can be brought to full strength.

Mr. James Wallace: The hon. Gentleman said that a place was not on offer. Who was making an offer?.

Mr. Fox: The reason for the replacement on that Committee was that a Conservative Member was appointed a PPS. Under the rules that I have described, he was ineligible to serve on the Committee, so another Conservative Member was appointed to fill his place. That is why I said that there was no place on offer from the Conservative party.
I hope that we can get over the problems of the past few weeks and that the six Select Committees can continue that worthwhile work.

Mr. A. J. Beith: I have some sympathy with the predicament of the hon. Member for Shipley (Mr. Fox), who has come late to these matters, having been appointed Chairman of the Committee of Selection since the original row of which this is still the rumbling consequence. He is largely an innocent in the matter, except in so far as he may have cast votes on matters to which I shall refer later. I have not troubled to check his Division record on that, because I am sure that he comes to the Chair of the Committee with a fresh mind and anxious to assist. As ever, his spirit and approach have been helpful and co-operative.
I almost regret the fact that the former Chairman of the Committee — the hon. Member for Gedling (Sir P. Holland)—is not present today. I worked with him for many years, and I sharply criticised the way in which he dealt with this matter.
In relation to the Select Committee on Defence, the Committee of Selection went through exactly the procedures described by the hon. Member for Shipley and sought to apply the overall, balanced figures of the House, taking into account the number of Members in minority parties. Having done so, the Committee nominated my hon. Friend the Member for Woolwich (Mr. Cartwright) to that Select Committee. The matter then came before the House, where that recommendation was voted down. I criticised the hon. Member for Gedling, who was then Chairman of the Committee of Selection, because I contended that he was conniving at the overturning of his Committee's recommendation, in that he was present in the Division Lobby thanking hon. Members who had voted against his Committee's recommendation.
I mention that to give the flavour of our original argument. The Government threw an SDP member off the Select Committee on Defence. Why did they do it? I am bound to say that I was not in full possession of the facts when I spoke in the debate and tried to explain why I believed they had done so. The hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) was put on the Committee in place of my hon. Friend the Member for Woolwich, and at the time everyone wondered why it had been done. It is reasonable that Ulster Unionist Members should be represented in proportion to their numbers, but they said that they were prepared to serve on only a limited number of Select Committees and, therefore, turned down the offer of places on several Committees. There seemed to be great anxiety to replace an existing member of the Committee with the hon. member for Fermanangh and South Tyrone. My hon. Friend had served with distinction on the Committee, and it was generally agreed, and mentioned during that debate, that he had been a most valuable member.
All was revealed in The Times — that valuable newspaper of record—which, although nowadays it has some lapses that I lament, went into the matter in some detail. Mr. Julian Haviland, always a careful journalist, said:
There are signs that ministers and those who advise them think that the best time to nobble the committees is at the outset, by interfering with the choosing of members by the nominally independent Committee of Selection.
He described what was happening and why. There was concern on the Government side that the right hon. Member for Spelthorne (Sir H. Atkins) should be appointed Chairman of the Defence Select Committee and considerable doubt as to whether he would gather enough votes to gain that chairmanship. At the time, the Government wanted him to be Chairman of the Liaison Committee as well, although he did not get that post.
How was the right hon. Gentleman's position to be secured as Chairman of the Select Committee on Defence? Mr. Haviland, referring to the Patronage Secretary, said:
Wakeham was active on another front. He sent an emissary to James Molyneaux, leader of the Official Ulster Unionists, who was aggrieved that his party had no member on any committee. An understanding was reached that Conservative votes would be used to take the Social Democrat, John Cartwright, off the committee and put on the Ulster Unionist, Ken Maginnis, instead. Maginnis does not admire Atkins but was expected to learn to do so quite quickly. These precautions proved unnecessary. The Conservative solved their own problem in the end, and outsiders did not count.

It is not for us to delve into the internal arguments of the Conservative party, which were prevalent at the time, and in which the position of the right hon. Member for Spelthorne was crucial. It may be remembered that there was much argument at the time about what his rightful position should be and the extent to which the Prime Minister's strong support for him should be evidenced in various ways. But that is neither our problem nor our business.
What happened was that, because of an internal wrangle in the Conservative party, a distinguished member of a Select Committee, who was known to be doing a good job, was thrown off the Committee, not by the Committee of Selection—not by the colleagues of the hon. Member for Shipley — but by the votes of the Conservative majority in the House. The Leader of the House cannot have it both ways. He cannot stand at the Dispatch Box and say that the Committee of Selection determines the membership of Select Committees, that it has nothing to do with the Government, who simply allow the impartial procedures to go ahead, and then take part in such a manoeuvre. Nor can he stand at the Dispatch Box and say that the allocation of Opposition time is purely a matter for the Leader of the Opposition, and that he has nothing to do with it. He knows that, at the end of the day, the votes of his majority push through those matters. It is nothing more noble or grand than that; it is the basic power of a Government majority.
The result was that my hon. Friend the Member for Woolwich was thrown off the Select Committee on Defence, and the SDP was then unrepresented on Select Committees because, being reasonable and moderate, it had made a bid for the single place on a Select Committee that it already had. It had not even picked out one Committee — for example, the Select Committee on Foreign Affairs — and said, "We will go on that Committee and no other." It simply wished to continue to be represented on the Select Committee on Defence. The Select Committee believed that to be reasonable, but the Government got their way by this squalid manoeuvre. Nothing has been done to put it right.
On the same evening, we sought to do what we shall try to do again— [Interruption.] I wonder whether I could prevail upon my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) to get me a glass of water, which is one of the many privileges of the official Opposition that may be as desirable to other hon. Members.
On that occasion, we tried to change the composition of the Select Committee on Welsh Affairs, because we believed that the Committee of Selection, perhaps unduly influenced by the constraints which the House has put on it, or by the United Kingdom return of Members of Parliament rather than the political position in Wales, had been grossly unfair to the party in Wales which had the best claim to the minority party seat on that Committee in terms of seats won and votes cast—it was certainly the best claim on votes cast, and it was an equal claim on seats won. We do not contend that Plaid Cymru should not be represented on that Committee, because it would be absurd for the next largest minority in Wales not to be represented on the Select Committee on Welsh Affairs. We support that proposition, just as the hon. Member for Caernarfon (Mr. Wigley) supports our view and has added his name to our amendment.
The effect of the decision, taken this time by the Committee of Selection, was that my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) was thrown off the Select Committee on Welsh Affairs on which he was a serving and distinguished member. Again, both inside and outside the House, it is widely recognised that my hon. Friend is one of the foremost political figures in Wales—a person whose opinions count and whose standing is high in Wales. It was extraordinary to throw him off the Committee in that way, and it is even more absurd that the hon. Member who was appointed to his place has, after a short time, been discharged from the Committee. I recall that, at the time, he made great play in his part of Wales of the importance of his place on the Committee and of the benefits that would flow from it. However, after a short time, to achieve the supposedly distinguished status of PPS, he has been removed from the Committee.

Mr. Fox: The hon. Gentleman's memory fails him. The reason why the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) was dropped from the Committee was that there were two conflicting nominations from two minor parties. In its wisdom, the Committee of Selection thought that when an hon. Member had served for a Parliament, it should not always be assumed that he must continue, because other hon. Members had a right to be considered. The place of the hon. Member for Ceredigion and Pembroke, North was taken by another Welsh Member from one of the minor parties.

Mr. Beith: I think that I had compressed my argument to a degree that made it fair for the hon. Member for Shipley to make that point. However, I believe that these Select Committees will do the best possible job if they build up the standing and status of their individual members.
For the Committee of Selection to say that because an hon. Member has served on a Select Committee for the duration of a Parliament he has had his turn and that it is time that another hon. Member came on to the Committee is fundamentally to misunderstand the nature of Back-Bench Select Committees. Those who have advocated these Committees from the start believe that the hon. Members who serve on them should do so for a fair period of time and thereby help to establish the status of those Committees, their Chairmen and their long-term interest in the issues being considered by them. They are not like Standing Committees, which constantly change their membership. They should establish themselves over a period of time.
I recognise that the Committee of Selection, because of the way that it judged it had to deal with the matter, finished up making a choice between two minority parties. However, I was referring to the later choice that the House made between my hon. Friend the Member for Ceredigion and Pembroke, North and our proposition to take off one of the Government's members. Our reason for making that proposition was that the Government had plenty of members on the Committee and, as it turned out, one of the hon. Members whose names appear on the Order Paper today did not need to stay on that Committee because he had other ways in which he could best serve the House.
The Government had room to manoeuvre. They had the opportunity to give up one of their places or to take the

other course which we suggested that same day, which was to increase the size of the Committee to the same size as the Scottish Affairs Committee. What was so unreasonable about the Committee for that other nation of Great Britain — Wales — having a Committee of the same size as Scotland's? By adopting that solution we would not have harmed anyone. We would not have taken a place filled by a Conservative Member or anyone else.
The Government had two options. They could have increased the size of the Committee or given up one of their places to us. They rejected both those reasonable suggestions. Again, that is where I think the position of the Leader of the House is so inconsistent. One minute he is happy to see the votes of Conservative Members used in the Division Lobby to overturn the recommendation of the Committee of Selection. Then he shelters behind the Committee of Selection in refusing to yield up a Government place in these circumstances.

Mr. David Steel: Has my hon. Friend overlooked the fact that the Conservative party in Wales is a minor party?.

Mr. Beith: Indeed, and that will be even more marked after the next general election.
The position in Scotland often exercises the mind of the House and is often raised by hon. Members in several parties. All that history could have been made a thing of the past and ceased to be a festering sore if the Government had taken some initiative to make things good now or if the Committee of Selection had found some way to do so.
Nothing has been done. There is still no SDP Member on any Select Committee. My hon. Friend the Member for Ceredigion and Pembroke, North is not a member of the Welsh Affairs Committee, where it is widely believed in Wales he is entitled to be and should be. Again and again, the reasonable claims of minorities in the House, which are huge minorities in the country, are simply overturned. It is not good enough. There is no way that we can accept that obscure procedures in the House have any effect and are an adequate means of dealing with these matters.
Following a point of order earlier on a similar matter, we were told from the Chair and by the Leader of the House that the Procedure Committee could sort out the problem. But what happens is that the votes of Government Members and Labour Members on the Procedure Committee are used to ensure that we cannot discuss the matter at all. The issue of Opposition time is not even considered. In instances such as this, the votes of the Government will be used to ensure that what we think is a great wrong is not put right. We are not prepared to accept that we can be put off and brushed aside in this way.
It is never our intention to disrupt the procedures of the House, but if we are told that there are good and adequate ways to which we should resort and they crumble in our hands because they have no substance, we are bound to react strongly. I quote the example of the Committee of Selection because here is a case where at least, in the instance of my hon. Friend the Member for Woolwich, the Committee of Selection had gone through the procedures and produced what we believed was a fair and satisfactory procedure, only to see it overturned by the Government's majority in the House. The Government shelter behind procedures and the possibility of referring problems to


distant Committees and will not do anything to put right a basic grievance. While one quarter of the voters send us here, we are not prepared to put up with it.

Mr. Bowen Wells: I wish to raise a matter which I believe to be of great importance.
The Committee of Selection has decided that Parliamentary Private Secretaries should not serve on Select Committees. This deprives Select Committees of some very able people and has produced in these motions a number of changes to the Select Committees which I can only describe as prejudicial to the good conduct of their business.
As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, the Select Committees need to build up a degree of experience and understanding of the matters that they are investigating. Constantly to change the membership of a Select Committee merely because an hon. Member is made a Parliamentary Private Secretary is bad for the Committee's business. Provided that an hon. Member is not appointed to serve as a Parliamentary Private Secretary to a Department which the Select Committee is overseeing, which obviously would not be acceptable, I see no real reason why a PPS cannot continue to serve on a Select Committee. The method of appointing and discharging members has, in my experience, disrupted the work of Committees.
I ask the House to consider the position where a serious matter has been investigated over a period of six to eight months and perhaps longer. Trips overseas may have been made and expense incurred so that the Committee might gain the knowledge required to write its report. If one of its members is then made a Parliamentary Private Secretary and is immediately discharged from the Committee, that is an extreme waste of the hon. Member's time and the money of the House, and it is done merely to fulfil the rule of the Committee of Selection which decided—and the House approved—that a PPS should be discharged immediately from any Select Committee on which he was serving.
In my view the Committee of Selection should at least wait until the work upon which the hon. Member concerned has been engaged is completed before moving to discharge him. A method might be developed to enable him to operate on the Committee until the completion of its current work and the production of its report. But I am certain that we are seriously undermining the effectiveness of Select Committees by adopting a system whereby Parliamentary Private Secretaries may not serve in the first place and, secondly, by discharging them with undue haste when they have already done a great deal of work and money has been spent on the production of its report.

Dr. David Owen: While it is fresh in the mind of the House, I take up the point just made by the hon. Member for Hertford and Stortford (Mr. Wells). There has been a depressing tendency in recent years to elevate Parliamentary Private Secretaries to membership of the Government and to expect them to accept the discipline of voting for the Government. They are not members of the Government. This is not part of an extension of patronage. It is a private arrangement

between a Minister and a Back-Bench Member. A PPS comes into the House to help the Minister with his parliamentary duties, but he is not part of the Government. This is a dangerous extension of the bureaucratising of the post of Parliamentary Private Secretary.
I was PPS, from the day that I entered the House, to the late Gerry Reynolds, a man for whom I had the utmost respect. Apart from being unable to speak on defence matters during that period, I was free to participate in any rebellion, in any vote against the Government and in any action in the House—and I did. What is more, I served on the Select Committee on Science and Technology during that period and learned a great deal to my personal benefit for subsequent years. I did not realise that the ruling had been made. It is wrong, and I hope that the Committee of Selection will think again about it. It is lunacy to take a PPS off a Committee in the middle of an investigation. I support the hon. Member for Hertford and Stortford and I am glad that he has brought the matter to the attention of the House.
It is courteous of the Leader of the House to be here, but he is the villain of the piece. The hon. Member for Shipley (Mr. Fox) serves two functions, as hon. Members often do. He is a skilled parliamentarian and, as Chairman of the Committee of Selection, he genuinely serves the interests of the House. He is also a skilled politician. Any member of the SDP remembering Darlington will acknowledge the hon. Gentleman's political skills. His speech moved deftly between his duties to the House and his duties to to his party.
Serious issues are involved for the Leader of the House. He faces the utmost humiliation. Having consipired to vote down the recommendation of the Committee of Selection that my hon. Friend the Member for Woolwich (Mr. Cartwright) should serve on the Select Committee on Defence—one of the most disgraceful episodes of this Parliament — the Government now pray in aid the Committee of Selection so that my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) is not appointed to the Select Committee on Welsh Affairs. If hon. Members had a genuinely free vote, few would support the propositions that my hon. Friend the Member for Woolwich should not serve on the Select Committee on Defence and that my hon. Friend the Member for Ceredigion and Pembroke, North should not serve on the Select Committee on Welsh Affairs.
How can we overcome some of the problems that we face? I understand why the Government insist on having a majority on Select Committees. We cannot object to that. Problems have arisen when more than one of the minority parties — the SDP, Liberals, the Ulster Unionists the Welsh nationalists or the Scottish nationalists—have a legitimate claim to be represented on a Select Committee. The answer lies in the Leader of the House enlarging the size of such Committees.
That solution would have solved the problems involved in the composition of the Select Committee on Defence. Of course there was a case for the Ulster Unionists to be represented on that Committee. The Ministry of Defence is involved in day-to-day events in Northern Ireland and in many of the problems of the Province. Who could deny the claims of the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) to serve on that Committee?
However, the Leader of the House had no right to use the Government Whips to defeat our proposal that my hon. Friend the Member for Woolwich should serve on that


Committee. The hon. Member for Watford (Mr. Garel-Jones) was in our Lobby shooing out Conservative Members who, having heard the arguments, wanted to support our case. Only a few minutes before, the Leader of the House had donned a mantle of pure innocence, telling us that he was not involved and that it was a House of Commons matter. He said that it would not be appropriate for him to vote, yet we had his Whip in our Lobby.
That happened in the middle of the night and was barely reported. One of the advantages of today's debate is that it is taking place in prime time—we can claim some credit for that, after last night's events—and perhaps even the BBC may report it. The descriptions of debates in the House given in the neutered and edited versions of "Yesterday in Parliament" are a disgrace. The BBC is perpetrating the old party system; it is part of that system. The independence of the governors of the BBC will be seriously questioned and will, I believe, be taken to the courts, on the issue of natural justice.
Dealing with the Leader of the House, which is a charming prospect, how can he defend the decision not to increase the size of the Select Committee on Welsh Affairs? The Liberal party has a long, proud history of involvement in Wales. No one has played a more active role in Welsh politics than my hon. Friend the Member for Ceredigion and Pembroke, North.
In recent months, there have been demonstrations about the European Community milk quotas and their effect on hill farmers in Wales. My hon. Friend has an intimate knowledge of agriculture in Wales. His is a knowledgeable voice, he lives in Wales, is involved with the people and speaks the language. Yet he does not serve on the Select Committee.
The debate is also about the way in which the House conducts its business. Is it reflecting the distortions of the voting system or does it have a responsibility to the country to reflect the political debate in its widest and most comprehensive form? The House faces a problem. Are we to become a backwater which is unable to reflect the day-to-day debate in councils and in by-elections to councils and Parliament? Are we to be rigid, fossilised and incapable of adapting?
The Labour party has become a unilateralist party. It is entitled to go down that route, but must the country have a Select Committee on Defence which is able to reflect only the views of the Government and of the new Labour party, with its unilateralism and signed-up members of CND? My hon. Friend the Member for Woolwich took the Labour party apart in the general election in a constituency which was thought to be a solid Labour seat. My hon. Friend is a man of the utmost integrity and is respected in WEU and in NATO. His voice should be heard on the Select Committee on Defence.

Mr. Gerald Bermingham: Does the right hon. Gentleman think that an hon. Member represents a political party or a constituency? A fundamental issue is involved.

Dr. Owen: An hon. Member represents both. He is sent here as a representative, not as a delegate. I know that some Labour Members find that doctrine hard to understand. An hon. Member takes into account the views of his party and of his constituents, but he is not mandated or told how to vote by a general management committee.
The House has a right to have legitimate and authentic voices reflected in its councils. My hon. Friend the Member for Woolwich is such a voice in defence matters and my hon. Friend the Member for Ceredigion and Pembroke, North is such a voice in Welsh Affairs.
The Leader of the House must decide what is to be done. In this Session we have had 19 Opposition days — part of the patronage of the leader of the Labour party. But he represents only one part of the Opposition, and represents it rather inadequately. Given the grievance that we feel about Select Committees, we might well have wished to use half an Opposition day to bring the matter to the House. We had no redress and no opportunity. The SDP was granted half a day, the Liberal party half a day and the Ulster Unionists half a day, by grace and favour of the leader of the Labour party. Is that democracy? Is that the position that the Leader of the Opposition will defend through 1985, 1986 and 1987?
I assure the leader of the Labour party that the issue will not go away. What he saw last night is just the tip of the iceberg. We make two legitimate demands: that our viewpoint is adequately represented on Select Committees, and that the allocation of Opposition Supply days reflects, at the very least, the expression of opinions represented in the country. It is not tolerable to carry on in the present way.
I know that the Leader of the Opposition has some difficulty. He has to balance the forces of disruption. I think that that is how he would see his role. Can the Labour party make more trouble for him than the Liberals and the Social Democrats? I ask him to lift his sights beyond this place and to consider what the people of the country think. They are beginning to realise that the Conservative party is conspiring to ensure that the Labour party has a monopoly of the 19 Opposition Supply days. They are beginning to understand the extent of the co-operation and fraternisation that exist between the usual channels—between the Labour party and the Conservative party. As the people become more and more aware of the direness of the Labour party programme, there will come a moment when they will say to the Tory party, "We are fed up to the teeth with what is happening between the two parties."
The power of disruption of the Labour party these days is inadequate, to say the least. Labour Members are hardly ever here. But apart from that—

Mr. Eric Forth (Mid-Worcestershire): Will the right hon. Gentleman agree that one of the results of proportional representation systems in other countries and coalition Governments is that there are more back-room dealings, more smoke-filled rooms, and more uncertainty than we ever have in our electoral system?

Dr. Owen: I have a feeling, Mr. Deputy Speaker, that you would not wish me to go too far down that road. Obviously, I hold a different view from the hon. Member for Mid-Worcestershire (Mr. Forth). There is a basic, fundamental, democratic issue involved. The alliance parties, which received 26 per cent. of the vote at the general election, are represented in inadequate numbers in this House. They have continued to receive that support in by-election after by-election—six in this Parliament. In fact, 36 per cent. of the people have voted for the SDP-Liberal alliance, 33 per cent. for the Conservative party, and a mere 29 per cent. for the Labour party. When we


see the expression of opinion that is building up in the country, it is at our peril in this House that we shut it off. That is the issue.
If the hon. Member for Shipley does not want a change in the electoral system, let me tell him that he is conspiring to ensure that there will be a change. He is becoming our ally. This House must at least accommodate the new political opinion that exists in the country. Is it right that the BBC should be allowed to carry on in the way that it does? It is a quango appointed by the Government, with some legacies from the last Labour Government. If the Broadcasting Complaints Commission cannot even investigate a major issue of this importance because it considers it to be beyond its terms of reference, it will have to be interpreted by the judges in the courts. What will happen there is an open question. The doctrine of natural justice may have to be extended to this area. It may be that only a legal judgment will restore the authority of this House, because this House is cheapening itself. Today the Leader of the House has an opportunity—.

Mr. D. N. Campbell-Savours: Will the right hon. Gentleman give way?.

Dr. Owen: Today the Leader of the House has an opportunity to start redressing the balance, to listen to the voice of the people of this country, and to reflect, in his decision on Select Committees, what he will later have to reflect in the allocation of Opposition Supply days. He is a parliamentarian and understands the House of Commons. I know that he is just as opposed as his hon. Friend the Member for Shipley to any change in the voting system, but it is incumbent on him to ensure that this House of Commons—.

Mr. Campbell-Savours: Will the right hon. Gentleman give way?.

Dr. Owen: —reflects opinion in the country.

Mr. David Alton: I am glad to follow my right hon. Friend the Member for Plymouth. Devonport (Dr. Owen), whose views I fully support. The motion raises very important issues for this House. I agree particularly with what my hon. Friend said about the ways in which our debates are broadcast and the obvious bias that is now being built into the BBC, despite the fact that we are given a measly allocation of the time available in this place. The BBC, especially in its "Today in Parliament" and "Yesterday in Parliament" programmes, totally ignores the contributions of alliance Members. That is outrageous, given the weight of opinion that is behind our views when they are expressed in this House.
In moving the motion, the hon. Member for Shipley (Mr. Fox) said that the Committee of Selection could have no regard for PR. We do not ask the Committees to have any regard for PR but we ask it to have some regard for the views of the people of this country. The way in which the Government Benches act in this House shows a sense of arrogance and disregard for the people that I find unbelievable. At the last general election about 8 million people voted for the alliance parties. Anyone would think, because of their 140 majority, that the Government won some great victory at the last general election; in fact, the Conservative vote went down by 700,000. Two out of

three people did not vote for the party which so arrogantly commands a massive and obscene majority on the Conservative Benches.
In Liverpool, where half a million people live, there is not one Conservative Member, nor is there one in cities such as Glasgow. The effect of motions such as the one before the House today is to deny the people who voted for the alliance at the general election the opportunity of being properly and adequately represented on the Committees of this House. That cannot be right.
The hon. Member for Shipley, in moving the motion, said that the Government must have a majority. That is legitimate. There is nothing unreasonable about Governments wanting a majority. What is important is the size of the majority. It is ludicrous to suggest that Committees cannot be made larger and that more Committee members cannot be appointed. The Government do not need massive majorities on Select Committees, which are supposed to act as guardians of the interests of hon. Members. The Select Committees are supposed to act as watchdogs, looking at the issues which affect this country. They are supposed to be drawing up programmes and policies for the benefit of the people.
I serve on the Select Committee on the Environment, which is currently undertaking good work, on an all-party basis, on acid rain. On such an issue it is not necessary for the Government to have a majority of three or four to protect their interests. Yet frequently the Government try to pack Committees to ensure that they have a massive majority. That undermines the role of Select Committees, because they then become a reflection of everything that is wrong with this House of Commons. They are turned into party political stalking horses, and that is not good enough.
I take issue with the hon. Member for Shipley in his reference to the regions of Scotland and Wales. We do not regard Scotland and Wales as regions of England. They are countries, which are part of the United Kingdom. That is an important difference between us and the Conservatives. We believe that the authentic voice of Wales, in the person of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) should be heard on the Select Committee for Welsh Affairs. In Wales, at the last general election, 31 per cent. of the people voted Conservative, 37 per cent. Labour, 23 per cent. alliance, and 7·8 per cent. nationalist.

Mr. Forth: Will the hon. Gentleman agree that there is often some resentment in England that the Celtic fringes are over-represented in parliamentary seats in this House? That is something that the people of England have to put up with.

Mr. Alton: I long for the day when the regions of England are represented by committees here. I also long for the day when there is devolution and decentralisation and genuine federal government. That will not happen as a result of denying the people of Scotland and Wales proper representation on Select Committees. As only 31 per cent. of the electorate in Wales voted Conservative and as the combined poll drawn by the alliance and Plaid Cymru was also 31 per cent., it cannot be right that we are denied representation on the Welsh Affairs Select Committee. The fact that we are denied representation shows utter disregard for the people of Wales and for my hon. Friend the Member for Ceredigion and Pembroke,


North. He has spoken vigorously and frequently on behalf of the people of Wales. His voice has often been heard in that Select Committee. Indeed, how many hon. Members speak the Welsh language? Yet we deny my hon. Friend a place on the Select Committee. He lives and farms in Wales and speaks for its people.
Last night we made it clear, by keeping Conservative Members here until the early hours of the morning, that we shall not tolerate the way in which we have been treated. We shall not put up with the corrupt and fraudulent electoral system that cheats the people of their proper representation. We shall not put up with the nepotistic

system that ensures that alliance voters are not adequately represented on Select Committees and which denies us Supply days on which to advance our views. When we ring the changes at the next general election we shall treat minorities with more respect and concern than has been shown to us. Last night we laid down a marker. If things do not change and if we are riot given better representation, we shall be back night after night and be forced to disrupt the House's proceedings until the Government decide to ensure that the views of some 8 million voters at the last general election are properly heard in all parts of the House.

Mr. Gerald Bermingham: There is an old saying which runs, "Methinks he doth protest too much". Much of what we have heard this morning is a protest that is based on a wish to reflect here the wishes of many people who, alliance Members say support them. Their arguments are misconceived, misrepresented and, if I might put it so boldly, an insult to the electorate.
In the short time that I have been a Member of Parliament, I have listened to the arguments that alliance Members advanced this morning many times. I have heard often about the 8 million votes and the 26 per cent. poll. There comes a time when we must ask just one question, which I put to the right hon. Member for Plymouth, Devonport (Dr. Owen) in an intervention. Is a Member of Parliament a Member for a party or for a constituency? Perhaps I am the right person to ask that question. The person who posed it to me stood for election as a member of one party, came here and became a member of another party. Others who have changed parties have occasionally put their cause to the electorate.

Mr. Wallace: As I understand it, the hon. Gentleman's point is that we are elected to represent a constituency. Why, then, when we have a statement from the Foreign Secretary on a European Community matter to which the hon. Member for Livingston (Mr. Cook) responds, does the hon. Member for Livingston take as long if not longer to respond than, say, my hon. Friend the Member for Inverness, Nairn and Lochabler (Mr. Johnston)? What is it about the constituency of Livingston that allows its hon. Member to speak three times as long as my hon. Friend?.

Mr. Bermingham: I wonder what the relevance of that question is to the debate. Perhaps it could be argued that my hon. Friend the Member for Livingston (Mr. Cook) replies on behalf of the official Opposition.
In regard to what the hon. Member for Liverpool, Mossley Hill (Mr. Alton) said about last night, we should ensure that the record is straight. We should be aware of how last night happened and how it began. Another hon. Member began the opposition to the Lords amendments. It is remarkable that the Liberal party did not arrive from dinner until approaching midnight, yet many other hon. Members—.

Mr. Alton: Where were you?.

Mr. Bermingham: On the Opposition Front Bench for almost all of the debate. The hon. Member for Mossley Hill may by all means challenge the business of the House and the Government — any Member for Parliament should challenge the Government as a duty—but he should at least be here to do it. The experience of many hon. Members who have served on Standing Committees in the past year is that alliance Members have frequently been absent.

Mr. Beith: Does he hon. Gentleman recall my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) having to take the Opposition Front Bench in a Standing Committee on Statutory Instruments because no Labour Members, Front or Back Bench, attended the Committee?.

Mr. Bermingham: I can also recall several occasions when I have had to move Liberal amendments in Standing Committees because no Liberals were present. Perhaps

that is a reflection of the argument that is at the heart of this matter. It is said that Select Committees should have more hon. Members. Nevertheless, Select Committees should reflect the House. I have the privilege of serving on a Select Committee. It is an interesting experience. I agree with the right hon. Member for Devonport that it is possible to gain detailed knowledge in such Committees. However, there are 650 hon. Members and a limited number of places on Select Committees.
I occasionally consider these matters with a disinterested eye. All hon. Members should be given the opportunity of serving on a Select Committee. That means reflecting the interests of hon. Members, and there seems no fairer way to reflect them than in the proportions in which hon. Members sit.
I have listened with interest to the arguments that have been advanced on whether we should proceed by way of the number of hon. Members elected or the percentage of votes cast at the general election. Were we to take the latter course, a number of amusing calculations could be developed. For example, on a Select Committee of 20, the division would be, say, 9:6:5 so as to reflect the percentages at the last general election, but that would in no way reflect the electorate's wishes.

Mr. Campbell-Savours: Did my hon. Friend hear the remarks of the right hon. Member for Plymouth, Devonport (Dr. Owen), who said that on the day he was elected he was appointed a Parliamentary Private Secretary, that he went on to hold the posts of Parliamentary Under-Secretary and Minister of State and sat in a Labour Cabinet for five years? The right hon. Gentleman now demands proportional representation, having on no occasion during all that time pressed the point. Never did he press the case for PR in a Labour Cabinet to the point of putting his job on the line. Now, finding himself a member of a minority party, he demands PR. The British people should treat with cynicism the protests of those who suddenly find a need to change the rules.

Mr. Bermingham: I am grateful to my hon. Friend for that intervention. The history books will record the accuracy of what he says and the reality of the will of the British people in this matter.

Dr. Owen: It seems extraordinary that an hon. Member who has been in the House for less than a year should be speaking for the official Opposition. The record should be put right. The Labour Government of whom the hon. Member for Workington (Mr. Campbell-Savours) speaks voted for proportional representation for European Assembly elections. The proposition that those elections should be by way of PR was made by the then Foreign Secretary, who happened to be the right hon. Member for Plymouth, Devonport (Dr. Owen).

Mr. Bermingham: I accept what the right hon. Gentleman says, and I repeat that the history books will show the full truth of the matter. In almost his final comments, the hon. Member for Berwick-upon-Tweed (Mr. Beith) said that Select Committees should reflect the percentages in the country.
The alliance bases its argument on the statement, "We got a quarter of the vote. Therefore, we were robbed when it came to our numbers in Parliament." The voters at the last election in each constituency were asked by the two


main political parties to vote for a candidate of each of those parties. In other words, the alliance put up only one candidate, whereas the two main parties gave the electorate a choice.
If the parties which the alliance represents are for ever to fight as an alliance, presumably they will continue to put to the electorate in each constituency a joint policy covering the various matters in their joint manifesto. Or, after the election, will each party go its own way in this House? If so, that would not be fair to the electorate.
The major parties put a clearly defined policy to the electorate in each constituency. [Interruption.] At least the two main parties were honest in putting their case to the electorate. It is only fair to the people that the party putting its policy at the time of a general election should state that policy clearly and definately. Once a constituency has chosen its Member of Parliament, that person has a duty to all the electorate in the constituency an he or she must represent all of those interests in this House.
For whom are the alliance Members speaking when they say that they represent a quarter of the electorate? Are they speaking for the people in mine and other constituencies who voted for the alliance? The interruption caused to Select Committees as a result of the almost perennial objections that are made, sometimes late at night, about the membership of Select Committees, is an insult to many of those who serve on Select Committees.

Mr. David Steel: The hon. Gentleman has based the whole of his speech so far on the proposition that we are saying that because we got 25 per cent. of the vote, we should have 25 per cent. of the time or 25 per cent. of the membership of Select Committees. We have never put forward such a proposition. Whereas the official Opposition claim the vast majority of all Supply days, as well as all the rights they enjoy—of speaking from the Front Bench, of getting in on statements, or making statements longer than Government statements and speaking at great length in all debates—we are asking for only a tiny percentage of the time on the Floor of the House and a tiny percentage—nothing like 25 per cent.—of the membership of Select Committees. The whole of the hon. Gentleman's speech is based on a misconception.

Mr. Bermingham: If the right hon. Gentleman had listened to the speech, especially the closing remarks, of the hon. Member for Berwick-upon-Tweed, he would have heard him say, as Hansard will show, that it was all a question of percentages, and he spoke of — [Interruption.]—representation of 25 per cent.
I hope that the House will agree to the Select Committee changes that have been proposed so that the membership of the committees may be complete and the work of the Committees, which is valuable to the House, may continue. I hope that hon. Members who have interrupted my remarks, from a sedentary position and otherwise, will be present in the months and years to come as frequently as I and many other hon. Members.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I hope that it will not be thought too bizarre if I confine my remarks to motions 1

to 6 on the Order Paper, which are the subject of the debate and which derive from the motion in the name of my hon. Friend the Member for Shipley (Mr. Fox).
Under Standing Order No. 82, approved by the House in 1979, the Committee of Selection, under the chairmanship of my hon. Friend, is entrusted with the responsibility of nominating the members of departmental Select Committees. A number of remarks have been made this morning—which were in the good nature that one expects of the House fresh on a Friday morning — suggesting that there is a new special relationship and that I am the organ grinder and my hon. Friend the mascot in the way that these matters are perfected.
I am anxious to keep the temperature in the Chamber as low as possible and not to add to any unparliamentary expressions. The right hon. Member for Plymouth, Devonport (Dr. Owen), when he was not threatening the BBC, was at his most entertaining and reactionary about the concept that the hierarchical society — which is clearly one to which he belongs both emotionally and by background—was portrayed in the relationship between myself and the Chairman of the Committee of Selection. I have to say, and it is sad to some extent, that that is a total travesty. The House has given entire discretion to the Committee of Selection in putting forward its nominations for the Committees. The Committee is not obliged to disclose its criteria. Its task, as defined by any charitable person, which must include the hon. Member for Rochdale (Mr. Smith), is not enviable. It could hardly be so in a House where up to 10 smaller Opposition parties together hold fewer than 50 seats.
I fully recognise that the membership of the departmental Committees should be decided with the widest possible measure of agreement. Last year the House agreed that all Committees — apart from the Scottish Affairs Committee, which has 13 members—should in future each have 11 members. In recommending that change to the House, which was contrary to the Liaison Committee's proposals for more compact Committees, I expressed the hope that that limited increase in numbers would provide the Committee of Selection and the House with more room for manoeuvre in seeking to balance conflicting claims to membership.
As the Liaison Committee pointed out, there must be a limit to the number of members on a Select Committee if its proceedings and questioning are to be effective. It is not practicable to expand membership to satisfy all claimants. I believe that last year's changes were as far as one could reasonably go in that last direction. Decisions on membership must, therefore, be taken. I cannot see how it can be done in any other way than on the basis of the view of the majority of the Members of the House. The Government's responsibility is to ensure that there is an opportunity for that to be expressed, and that we have done today.

Question put:—

The House divided: Ayes 86, Noes 13.

Division No. 447]
[10.53 am


AYES


Baker, Rt Hon K. (Mole Vall'y)
Boscawen, Hon Robert


Baker, Nicholas (N Dorset)
Bowden, Gerald (Dulwich)


Bermingham, Gerald
Braine, Sir Bernard


Berry, Sir Anthony
Brown, R. (N'c'tle-u-Tyne N)


Best, Keith
Buchan, Norman


Biffen, Rt Hon John
Buck, Sir Antony


Biggs-Davison, Sir John
Burt, Alistair






Campbell-Savours, Dale
Mather, Carol


Channon, Rt Hon Paul
Mellor, David


Clarke, Rt Hon K. (Rushcliffe)
Merchant, Piers


Clarke, Thomas
Millan, Rt Hon Bruce


Cocks, Rt Hon M. (Bristol S.)
Miller, Hal (B'grove)


Cohen, Harry
Molyneaux, Rt Hon James


Coombs, Simon
Montgomery, Fergus


Cope, John
Moore, John


Corbyn, Jeremy
Neubert, Michael


Cox, Thomas (Tooting)
Parry, Robert


Dalyell, Tam
Pavitt, Laurie


du Cann, Rt Hon Edward
Raison, Rt Hon Timothy


Eggar, Tim
Rees, Rt Hon Peter (Dover)


Emery, Sir Peter
Rippon, Rt Hon Geoffrey


Evans, John (St. Helens N)
Roberts, Ernest (Hackney N)


Fox, Marcus
Shelton, William (Streatham)


Goodlad, Alastair
Shore, Rt Hon Peter


Gow, Ian
Skinner, Dennis


Gregory, Conal
Spearing, Nigel


Gummer, John Selwyn
Spicer, Michael (S Worcs)


Hayhoe, Barney
Steen, Anthony


Henderson, Barry
Stern, Michael


Hickmet, Richard
Stewart, Ian (N Hertf'dshire)


Hind, Kenneth
Straw, Jack


Hogg, Hon Douglas (Gr'th'm)
Tebbit, Rt Hon Norman


Hogg, N. (C'nauld &amp; Kilsyth)
Temple-Morris, Peter


Holland, Stuart (Vauxhall)
Thorne, Neil (Ilford S)


Howard, Michael
Torney, Tom


Hunt, David (Wirral)
Wakeham, Rt Hon John


Janner, Hon Greville
Wardle, C. (Bexhill)


Jones, Robert (W Herts)
Watts, John


Jopling, Rt Hon Michael
Wells, Bowen (Hertford)


Lang, Ian
Whitney, Raymond


Lawson, Rt Hon Nigel
Wood, Timothy


Lilley, Peter



Lord, Michael
Tellers for the Ayes:


Mackenzie, Rt Hon Gregor
Mr. Albert McQuarrie and


Major, John
Mr. Eric Forth.


Malone, Gerald





NOES


Alton, David
Smith, Cyril (Rochdale)


Ashdown, Paddy
Steel, Rt Hon David


Beith, A. J.
Wainwright, R.


Freud, Clement
Wallace, James


Howells, Geraint



Johnston, Russell
Tellers for the Noes:


Kennedy, Charles
Mr. Archy Kirkwood and Mr. Malcolm Bruce.


Owen, Rt Hon Dr David



Penhaligon, David

Question accordingly agreed to.

Ordered,
That Mr. Lewis Carter-Jones be discharged from the Trade and Industry Committee and Mr. Bernard Conlan be added to the Committee.

EDUCATION, SCIENCE AND ARTS

Ordered,
That Mr. Michael McNair-Wilson be discharged from the Education, Science and Arts Committee and Mr. Roger Sims be added to the Committee. —[Mr. Fox, on behalf of the Committee of Selection.]

ENVIRONMENT

Motion made, and Question proposed,
That Sir Reginald Eyre be discharged from the Environment Committee and Mr. Julian Critchley be added to the Committee.—[Mr. Fox, on behalf of the Committee of Selection.]

The House proceeded to a Division—

Mr. McQuarrie and Mr. Forth were appointed Tellers for the Ayes but no Member being willing to act as Teller for the Noes, MR. DEPUTY SPEAKER declared that the Ayes had it.

Ordered,

That Sir Reginald Eyre be discharged from the Environment Committee and Mr. Julian Critchley be added to the Committee.

FOREIGN AFFAIRS

Motion made, and Question put,
That Mr. Mark Robinson be discharged from the Foreign Affairs Committee and Mr. Robert Harvey be added to the Committee.—[Mr. Fox, on behalf of the Committee of Selection.]

The House divided: Ayes 86, Noes 19.

Division No. 448]
[11.07 am


AYES


Baker, Rt Hon K. (Mole Vall'y)
Knight, Gregory (Derby N)


Bermingham, Gerald
Lang, Ian


Berry, Sir Anthony
Lilley, Peter


Best, Keith
Lloyd, Peter, (Fareham)


Biffen, Rt Hon John
Lord, Michael


Boscawen, Hon Robert
Mackenzie, Rt Hon Gregor


Bowden, Gerald (Dulwich)
Major, John


Braine, Sir Bernard
Malone, Gerald


Brown, R. (N'c'tle-u-Tyne N)
Mather, Carol


Buchan, Norman
Mellor, David


Buck, Sir Antony
Merchant, Piers


Burt, Alistair
Miller, Hal (B'grove)


Channon, Rt Hon Paul
Molyneaux, Rt Hon James


Clarke, Rt Hon K. (Rushcliffe)
Montgomery, Fergus


Clarke, Thomas
Moore, John


Cocks, Rt Hon M. (Bristol S.)
Neubert, Michael


Coombs, Simon
Newton, Tony


Cope, John
Parry, Robert


Cox, Thomas (Tooting)
Pavitt, Laurie


Cunningham, Dr John
Raison, Rt Hon Timothy


Currie, Mrs Edwina
Rees, Rt Hon Peter (Dover)


Dalyell, Tam
Shelton, William (Streatham)


Douglas-Hamilton, Lord J.
Spearing, Nigel


du Cann, Rt Hon Edward
Stanbrook, Ivor


Dykes, Hugh
Steen, Anthony


Emery, Sir Peter
Stern, Michael


Evans, John (St. Helens N)
Stewart, Ian (N Hertf'dshire)


Finsberg, Sir Geoffrey
Straw, Jack


Fookes, Miss Janet
Tebbit, Rt Hon Norman


Fox, Marcus
Temple-Morris, Peter


Goodlad, Alastair
Thorne, Neil (Ilford S)


Gow, Ian
Torney, Tom


Gregory, Conal
Wakeham, Rt Hon John


Hattersley, Rt Hon Roy
Walden, George


Hayhoe, Barney
Walters, Dennis


Heffer, Eric S.
Wardle, C. (Bexhill)


Henderson, Barry
Watts, John


Hickmet, Richard
Wells, Bowen (Hertford)


Hogg, Hon Douglas (Gr'th'm)
Wheeler, John


Hogg, N. (C'nauld &amp; Kilsyth)
Whitney, Raymond


Holland, Stuart (Vauxhall)
Wood, Timothy


Howard, Michael



Hunt, David (Wirral)
Tellers for the Ayes:


Janner, Hon Greville
Mr. Albert McQuarrie and Mr. Eric Forth.


Jones, Robert (W Herts)





NOES


Alton, David
Penhaligon, David


Ashdown, Paddy
Skinner, Dennis


Beith, A. J.
Smith, Cyril (Rochdale)


Bruce, Malcolm
Steel, Rt Hon David


Cohen, Harry
Wainwright, R.


Corbyn, Jeremy
Wallace, James


Freud, Clement
Wareing, Robert


Howells, Geraint



Hughes, Simon (Southwark)
Tellers for the Noes:


Johnston, Russell
Mr. Archy Kirkwood and Mr. Charles Kennedy.


Nellist, David



Owen, Rt Hon Dr David

Question accordingly agreed to.

Ordered,


That Mr. Mark Robinson be discharged from the Foreign Affairs Committee and Mr. Robert Harvey be added to the Committee.

It be more than one and a half hours after the first motion to be moved on behalf of the Committee of Selection had been entered upon, Mr. Deputy Speaker proceeded, pursuant to the order [12 July], to put forwith the Questions necessary to dispose of the remaining motions.

AGRICULTURE

Motion made, and Question put,
That Mr. Michael Lord be discharged from the Agriculture Committee and Mr. Jim Spicer be added to the Committee.[Mr. Fox, on behalf of the Committee of Selection.]

The House divided: Ayes 92, Noes 3.

Division No. 449]
[11.15 am


AYES


Alton, David
Janner, Hon Greville


Baker, Rt Hon K. (Mole Vall'y)
Jones, Robert (W Herts)


Baker, Nicholas (N Dorset)
Kennedy, Charles


Beith, A. J.
Kirkwood, Archy


Bermingham, Gerald
Knight, Gregory (Derby N)


Berry, Sir Anthony
Lang, Ian


Best, Keith
Lilley, Peter


Biffen, Rt Hon John
Lloyd, Peter, (Fareham)


Boscawen, Hon Robert
Lord, Michael


Bowden, Gerald (Dulwich)
Major, John


Braine, Sir Bernard
Malone, Gerald


Brown, R. (N'c'tle-u-Tyne N)
Mather, Carol


Bruce, Malcolm
Mayhew, Sir Patrick


Buck, Sir Antony
Mellor, David


Burt, Alistair
Merchant, Piers


Channon, Rt Hon Paul
Miller, Hal (B'grove)


Clarke, Rt Hon K. (Rushcliffe)
Molyneaux, Rt Hon James


Clarke, Thomas
Montgomery, Fergus


Cocks, Rt Hon M. (Bristol S.)
Moore, John


Coombs, Simon
Neubert, Michael


Cope, John
Newton, Tony


Cox, Thomas (Tooting)
Owen, Rt Hon Dr David


Cunningham, Dr John
Pavitt, Laurie


Currie, Mrs Edwina
Penhaligon, David


Douglas-Hamilton, Lord J.
Raison, Rt Hon Timothy


du Cann, Rt Hon Edward
Smith, Cyril (Rochdale)


Dykes, Hugh
Stanbrook, Ivor


Eggar, Tim
Steel, Rt Hon David


Emery, Sir Peter
Steen, Anthony


Evans, John (St. Helens N)
Stern, Michael


Finsberg, Sir Geoffrey
Stewart, Ian (N Hertfdshire)


Fookes, Miss Janet
Straw, Jack


Fox, Marcus
Temple-Morris, Peter


Freud, Clement
Thorne, Neil (Ilford S)


Goodlad, Alastair
Torney, Tom


Gow, Ian
Wainwright, R.


Gregory, Conal
Wakeham, Rt Hon John


Hayhoe, Barney
Walden, George


Henderson, Barry
Wallace, James


Hickmet, Richard
Walters, Dennis


Hind, Kenneth
Watts, John


Hogg, Hon Douglas (Gr'th'm)
Wells, Bowen (Hertford)


Hogg, N. (C'nauld &amp; Kilsyth)
Wheeler, John


Holland, Stuart (Vauxhall)
Whitney, Raymond


Howard, Michael



Howells, Geraint
Tellers for the Ayes:


Hughes, Simon (Southwark)
Mr. Albert McQuarrie and


Hunt, David (Wirral)
Mr. Eric Forth.




NOES


Nellist, David
Tellers for the Noes:


Parry, Robert
Mr. D. N. Campbell-Savours and Mr. Jeremy Corbyn.


Skinner, Dennis

Question accordingly agreed to.

Ordered,

That Mr. Michael Lord be discharged from the Agriculture Committee and Mr. Jim Spicer be added to the Committee.

WELSH AFFAIRS

Motion made, and Question proposed,
That Mr. Robert Harvey be discharged from the Committee on Welsh Affairs and Mr. Keith Best be added to the Committee.—[Mr. Fox, on behalf of the Committee of Selection.

Amendment proposed to the Question, to leave out 'Mr. Keith Best' and insert 'Mr. Geraint Howells'.—[Mr. Beith.]

Question put, That the amendment be made:—

The House divided: Ayes 19, Noes 75.

Division No. 450]
[11.26 am


AYES


Alton, David
Kennedy, Charles


Ashdown, Paddy
Owen, Rt Hon Dr David


Beith, A. J.
Parry, Robert


Bruce, Malcolm
Penhaligon, David


Campbell-Savours, Dale
Skinner, Dennis


Cox, Thomas (Tooting)
Steel, Rt Hon David


Evans, John (St, Helens N)
Wainwright, R.


Freud, Clement



Henderson, Barry
Tellers for the Ayes:


Howells, Geraint
Mr. Archy Kirkwood and Mr. James Wallace.


Hughes, Simon (Southwark)



Johnston, Russell





NOES


Baker, Rt Hon K. (Mole Vall'y)
Lord, Michael


Baker, Nicholas (N Dorset)
Major, John


Bermingham, Gerald
Malone, Gerald


Berry, Sir Anthony
Mather, Carol


Best, Keith
Mayhew, Sir Patrick


Boscawen, Hon Robert
Mellor, David


Bowden, Gerald (Dulwich)
Merchant, Piers


Braine, Sir Bernard
Miller, Hal (B'grove)


Buck, Sir Antony
Molyneaux, Rt Hon James


Burt, Alistair
Montgomery, Fergus


Channon, Rt Hon Paul
Moore, John


Clarke, Rt Hon K. (Rushcliffe)
Neubert, Michael


Cocks, Rt Hon M. (Bristol S.)
Newton, Tony


Coombs, Simon
Raison, Rt Hon Timothy


Cope, John
Rhodes James, Robert


Currie, Mrs Edwina
Rippon, Rt Hon Geoffrey


Dalyell, Tarn
Shelton, William (Streatham)


Douglas-Hamilton, Lord J.
Smith, Tim (Beaconsfield)


Dykes, Hugh
Stanbrook, Ivor


Eggar, Tim
Steen, Anthony


Emery, Sir Peter
Stern, Michael


Finsberg, Sir Geoffrey
Stewart, Ian (N Hertf'dshire)


Fookes, Miss Janet
Temple-Morris, Peter


Fox, Marcus
Thorne, Neil (Ilford S)


Goodlad, Alastair
Torney, Tom


Gow, Ian
Wakeham, Rt Hon John


Gregory, Conal
Walden, George


Hayhoe, Barney
Waller, Gary


Henderson, Barry
Walters, Dennis


Hickmet, Richard
Warren, Kenneth


Hind, Kenneth
Watts, John


Hogg, Hon Douglas (Gr'th'm)
Wells, Bowen (Hertford)


Hogg, N. (C'nauld &amp; Kilsyth)
Wheeler, John


Howard, Michael
Whitney, Raymond


Hunt, David (Wirral)
Wood, Timothy


Jones, Robert (W Herts)



Knight, Gregory (Derby N)
Tellers for the Noes:


Lang, Ian
Mr. Albert McQuarrie and Mr. Eric Forth.


Lilley, Peter



Lloyd, Peter, (Fareham)

Question accordingly negatived.

Main Question put:—

The House divided: Ayes 78, Noes 19.

Division No 451]
[11.35am


AYES


Baker, Rt Hon K. (Mole Vall'y,)
i Lloyd, Peter, (Fareham)


Baker, Nicholas (N Dorset)
Lord, Michael


Bermingham, Gerald
Major, John


Berry, Sir Anthony
Malone, Gerald


Best, Keith
Mather, Carol


Boscawen, Hon Robert
Mayhew, Sir Patrick


Bowden, Gerald (Dulwich)
Mellor, David


Brown, N. (N'c'tle-u-Tyne E)
Merchant, Piers


Brown, R. (N'c'tle-u-Tyne N)
Miller, Hal (B'grove)


Buck, Sir Antony
Molyneaux, Rt Hon James


Burt, Alistair
Montgomery, Fergus


Channon, Rt Hon Paul
Moore, John


Clarke, Rt Hon K. (Rushcliffe)
Neubert, Michael


Cocks, Rt Hon M. (Bristol S.)
Newton, Tony


Coombs, Simon
Pavitt, Laurie


Cope, John
Raison, Rt Hon Timothy


Currie, Mrs Edwina
Rhodes James, Robert


Eggar, Tim
Rippon, Rt Hon Geoffrey


Emery, Sir Peter
Smith, Tim (Beaconsfield)


Evans, John (St. Helens N)
Spearing, Nigel


Finsberg, Sir Geoffrey
Stanbrook, Ivor


Fookes, Miss Janet
Steen, Anthony


Fox, Marcus
Stern, Michael


Goodlad, Alastair
Stewart, Ian (N Hertf'dshire)


Gow, Ian
Temple-Morris, Peter


Gregory, Conal
Thorne, Neil (Ilford S)


Hayhoe, Barney
Torney, Tom


Heffer, Eric S.
Wakeham, Rt Hon John


Henderson, Barry
Walden, George


Hickmet, Richard
Waller, Gary


Hind, Kenneth
Walters, Dennis


Hogg, Hon Douglas (Gr'th'm)
Warren, Kenneth


Hogg, N. (C'nauld &amp; Kilsyth)
Watts, John


Howard, Michael
Wells, Bowen (Hertford)


Hunt, David (Wirral)
Wheeler, John


Janner, Hon Greville
Whitney, Raymond


Jones, Robert (W Herts)
Wood, Timothy


Kaufman, Rt Hon Gerald



Knight, Gregory (Derby N)
Tellers for the Ayes


Lang, Ian
Mr. Albert McQuarrie and


Lilley, Peter
Mr. Eric Forth




NOES


Alton, David
Nellist, David


Ashdown, Paddy
Owen, Rt Hon Dr David


Beith, A. J.
Parry, Robert


Bruce, Malcolm
Penhaligon, David


Corbyn, Jeremy
Steel, Rt Hon David


Cox, Thomas (Tooting)
Wainwright, R.


Freud, Clement
Wallace, James


Howells, Geraint



Hughes, Simon (Southwark)
Tellers for the Noes:


Johnston, Russell
Mr. D. N. Campbell-Savours and Mr. Dennis Skinner.


Kennedy, Charles



Kirkwood, Archy

Question accordingly agreed to.

Ordered,
That Mr. Robert Harvey be discharged from the Committee on Welsh Affairs and Mr. Keith Best be added to the Committee.

It being after Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings).

Water Supplies (England)

The Minister for Housing and Construction (Mr. Ian Gow): With permission, Mr. Speaker, I shall make a statement about water supplies.
I should like to apologise to the hon. Member for Copeland (Dr. Cunningham) for the fact that, for reasons which I have explained to him, he did not receive a copy of the statement earlier than he did.
Since my statement on 9 July, the very dry weather has continued, particularly on the western side of England, and hosepipe bans affect 21 million people. Water shortages are becoming severe in Devon and Cornwall, in parts of Wales, about which my right hon. Friend the Secretary of State for Wales has already made a statement, and in the north-west, where I reviewed the position yesterday with the chairman of the North West water authority.
In parts of the north-west rainfall has been less in the first seven months of this year than in any year since records began, 91 years ago. The major reservoirs at Haweswater and Thirlmere are lower than in July 1976. Hosepipe bans are in force in almost all the region and 15 drought orders ahve been made to authorise exceptionally low water levels in rivers. The authority applied last week for orders to authorise additional abstractions from Ullswater and Windermere, and this week to restrict inessential uses of water.
Since my statement on 9 July, the situation in the southwest has become more serious. Three orders have been made to enable the South West water authority to prohibit or limit the use of water for certain inessential purposes, and another 12 orders have been made to permit exceptionally low river levels. However, demand has been unprecedently high. On Wednesday the authority appealed for a 50 per cent. reduction in consumption if rationing is to be avoided. It has also applied for power to introduce water rationing by rota cuts or by standpipes throughout Cornwall and in much of Devon, and is preparing plans to start rationing on 9 August if necessary. My hon. Friend the Parliamentary Under-Secretary of State is today reviewing the position in the south-west with the chairman of the authority, and I shall be visiting the area on Thursday of next week.
I met all chairmen of water authorities on 18 July and repeated that I expected them to take early precautionary action, whether by hosepipe ban or by drought order applications, to reduce consumption and conserve supplies. I reaffirmed my earlier advice to the water companies when I addressed their chairmen in London on Wednesday.
The exceptionally low rainfall in some parts of England underlines the importance of the responsible and economical use of water. I ask everyone to comply with restrictions which are imposed in the interest of the community as a whole and to follow the advice which authorities and companies are giving in order to diminish the prospect of more severe restrictions later on.

Dr. John Cunningham: I am grateful to the Minister for his apology, which I accept. However, the Opposition do not accept the fact that the Secretary of State for the Environment was not present to make this statement. He was available to the British Broadcasting


Corporation earlier today for an interview about another matter, and he should be in the House to answer for his responsibilities on this issue.
I regret that the statement is one of massive complacency and that the Government's actions are coming far too late to alleviate the position of millions of people. The prospect of water shortages has been obvious since early this year — certainly since Easter. The Government are doing too little too late to help people. Indeed, the implication of the statement is that the Government are expecting people in the south-west and the north-west to endure indefinite water shortages and rationing. Government policy—or, more properly, lack of it — has been a major contributory factor in the problem.
The minister's statement was devoid of mention of any useful action by the Government to relieve the present problems. In real terms, expenditure on water resources under this Government has been cut by almost half since 1981–82. In addition, the external financing limits applied to water authorities have prevented them from borrowing to finance the investment that many of them would wish to make, as was made clear on radio this morning by Mr. Roger White, the water spokesman for the Association of Local Authorities. He said that the shortage of capital investment and Government cuts in the water authority's capital programmes meant that they were unable to supply consumers. The government have been too busy attacking councils and their capital expenditure programmes to devote sufficient attention to the critical water shortage.
Before he made his statement, did the Minister seek advice from the Meteorogical Office? If so, what advice did he receive—[Interruption.] The hon. Member for Enfield, North (Mr. Eggar) may laugh, but people in the south-west and the north-west are not laughing. The hon. Gentleman had better recognise that there is great anger and frustration, especially in areas where water is being piped away at the same time as consumers in those areas have had their consumption restricted, as is the case in the area that I represent.
Does the Minister recall what the Select Committee on Science and Technology of the House of Lords said about Government policy in December 1982? It reminded Parliament that
Ministers have a duty under…the Water Act 1973 to promote a national policy for water in England and Wales and a somewhat similar duty in Scotland.
The Committee concluded:
There is in fact no national plan and it is difficult to see what national policy, if any, exists.
Since then the Government have made further cuts in investment in the water supply industry.
Does not the long-term trend of demand for water show clearly that this problem will occur again and again unless there are fundamental changes in Government policy? Will the Minister undertake immediately to set in train such a fundamental review?.

Mr. Gow: My right hon. Friend the Secretary of State asked me to make the statement today, because I was entrusted with special responsibility for the water industry, because — as the hon. Gentleman will remember — I answere a private notice question on it earlier this month, because I was in the north-west yesterday and because I am going to the south-west next Thursday.
I reject entirely the hon. Gentleman's charge of complacency in the Government. There most certainly is

not. Hosepipe bans were first imposed in the south-west on 12 May, and in the north-west on 2 June. The first drought orders were made for the north-west on 7 June and for the south-west on 21 June. In the current financial year, £230 million of capital investment is being spent to improve water resources and supply.
I receive the fortnightly reports issued by the Meteorological Office, and earlier this month I met the two chief scientists. Although the forecasting of weather is an imperfect science, the forecasts show no immediate prospect of an end to the dry spell.

Miss Janet Fookes: Would my hon. Friend confirm that the South West water authority is in no way to blame for the present water shortage? Apart from the lack of rainfall from Heaven, should not the blame be placed on those in the localities who have repeatedly resisted the authority's attempts to find suitable sites, and on the time that it appears to take the Government to come to conclusions after public inquiries? Furthermore, will my hon. Friend take on board the fact that the South West water authority wants the Roadford reservoir to be larger than has been approved? Will he have serious second thoughts on that matter, which is critical?.

Mr. Gow: As my hon. Friend knows, since the drought of 1976, Wimbleball reservoir has been opened and on 5 June I opened the new reservoir at Colliford. It is hoped that work will begin on the new Roadford reservoir before long, and I shall discuss my hon. Friend's point about capacity with the chairman of the authority. In the southwest the exceptionally dry weather, coupled with an increase in demand, has led to the present restrictions.

Mr. David Penhaligon: I remind the Minister that we have had hosepipe orders almost every year since I have been a Member of the House, so it cannot be blamed only on the weather. May I bring the Minister up to date by telling him that boil orders have been placed on the districts of Kerrier, Penwith and Carrick, in that all water for domestic use must be boiled?
Can the Minister tell the House how the applications for orders made to his Department are progressing? I understand that at present the legislation requires that about 3 million gallons of water is pumped back from one reservoir into a river. It seems logical that that loophole should be stopped and that the water is made available to the people of the south-west.
The Government's complacency on this issue is outrageous. I and other hon. Members who live a long way from London cannot help but believe that if the people of London faced such a problem a Cabinet Minister would have made the statement, a special Minister would have been appointed, and the House would probably be asked to sit in special session to pass new legislation to deal with the problem. However, because the problem is in the far south-west, if anything, the attitude of Conservative Members is that this is rather funny. It is anything but funny; it is a disgrace, and many people will suffer because of it.

Mr. Gow: The hon. Gentleman is right to say that this is a serious matter for those who are affected, and I agree with him entirely. I repeat that since 1976 steps have been taken to improve the water supply in the South West water authority area, notably the opening of the two reservoirs


to which I referred a moment ago. I assure the hon. Gentleman that applications for drought orders received by my Department will be processed with the upmost speed, and that we shall do all we can to expedite the granting of drought orders, subject of course to the statutory duties of my right hon. Friend.

Sir Peter Emery: I thank my hon. Friend for making a statement and for emphasising the seriousness of the position. I reject the accusation of complacency, because my hon. Friend has done everything possible to back local water boards in the requests that they have made to his Department. Can he go a stage further than his previous statement and say that when orders are requested they will be approved by the Department on the day that the request is made? Will he examine the position carefully and ensure that rota cuts are used so that we need not have the great hardship for the elderly and the infirm of rationing by the use of standpipes? That would cause great difficulty to such people and should be avoided if at all possible.
Will my hon. Friend consider for the future ensuring that the take of water from rivers can continue for a long period after the drought to ensure that the build-up of reservoirs is increased so that next year our reservoirs in the south-west will be full to capacity, which they were not this year?.

Mr. Gow: I can assure my hon. Friend that the procedures for dealing with drought orders will be gone through as expeditiously as possible in accordance with the provisions of section 1 of the Drought Act 1976. I understand my hon. Friend's point about the undesirability of standpipes unless they become absolutely necessary. My hon. Friend the Parliamentary Under-Secretary of State is discussing that very matter with the chairman of the South West water authority today.
I shall discuss with the chairman when I see him on Thursday my hon. Friend's suggestion about the extraction from rivers.

Mr. Tam Dalyell: From the time that the hon. Gentleman was the Prime Minister's Parliamentary Private Secretary, does he recall that his boss had no hesitation in hiring the Danish ship Herta Maersk to take fresh water from Southampton, Lisbon and Auckland, New Zealand, to the Falkland Islands? Is the south-west of England considered to be less important than the southwest Atlantic? What are the figures for investment to which my hon. Friend the Member for Copeland (Dr. Cunningham) referred? Is this crisis not predictable and predicted, foreseeable and foreseen?.

Mr. Gow: The hon. Gentleman makes a comparison between the Falkland Islands and the south-west of England. Has he been to the Falkland Islands?.

Mr. Dalyell: No, but the Minister has.

Mr. Gow: Yes, and I was about to come to that. I was about to make the point that any hon. Member who had visited the Falkland Islands would know that, whatever other problems may exist there, there is no shortage of water. Therefore, a comparison between the water needs of the south-west of England and those of the Falkland Islands is not valid.

Mr. Dalyell: That ship was filled with fresh water.

. Gow: As for investment, I have told the House already that in the current year we are spending £230 million on improving water resources and supply.

Mr. Anthony Steen: Is my hon. Friend aware that the position in the south-west is made worse by the inability to switch water from the Wimbleball reservoir on Exmoor, which at the moment is 75 per cent. full? Can he find out why the water cannot be switched to areas which need it?
Is my hon. Friend also aware that one third of the 20 million gallons of water used in Plymouth every day goes to waste because of defective and leaking old pipes? Will he ask the South West water authority to spend some of its £70 million a year income on patching up those pipes?
Is my hon. Friend also aware that because of water bureaucracy the reservoirs in Devon have had to be emptied before water from streams and rivers which has been pouring into the sea can be tapped? At the moment the reservoirs are empty and the water in streams and rivers continues to pour into the sea. Cannot my hon. Friend do something to reverse that process?
Will my hon. Friend pay tribute to the people of South Hams, who year after year have patiently endured the totally unacceptable position of being without running water for two or three months every year?.

Mr. Gow: I willingly pay tribute to my hon. Friend's constituents who have suffered in the way that he has described. I will discuss my hon. Friend's point about Wimbleball with the chairman of the authority when I see him on Thursday.
My hon. Friend is right in what he says about leaks. There is a substantial loss of water as a result of leaks from old pipes, and water authorities will be taking action in the future, as they have done in the past, to diminish that loss of water.
Finally, my hon. Friend asked about water running into the sea from streams and rivers. Obviously it is necessary to keep those water courses at a certain level, but if it is possible to have further abstractions that will be decided by the chairman of the authority.

Mr. Dennis Skinner: I hope that the Secretary of State will not blame Arthur Scargill or the NUM for this, as he has tried to about almost everything else.
Is the Minister aware that when he got his job I sent him a letter about the fate of people producing pipes at Clay Cross works and pointed out to him that it would make some sense for the Government to implement a big capital investment programme to make sure that we got a better water system by repairing all those leaking pipes and thereby putting more people to work or stop people being sacked at Clay Cross works, Stanton and Staveley in Derbyshire, putting them out of work when they could be producing more pipes to carry out this massive programme? Does the hon. Gentleman recall that he told me initially that he was monitoring the situation and that everything would be under control?
Is the Minister also aware that in my second letter to him I pointed out that the situation had got worse? So far from the Minister being on top of his job and making sure that he has a massive investment programme to provide that work and to stop the water leaking away, he has just sat on his hands and watched people being thrown on to the scrap heap as a result.

Mr. Gow: The hon. Gentleman has written to me on the subject of pipes, and I have made it clear to the House that there is already a substantial programme of capital investment to improve our water supplies. However, I must tell the hon. Gentleman that the resources available for capital investment are not unlimited. It is essential to understand that, and irresponsible calls from the hon. Gentleman and others for financial resources which are not available are unrealistic and exceedingly unhelpful.

Mr. Gary Waller: Bearing in mind that the majority of householders have no real incentive, other than good will, to reduce their water consumption and that the cost of installing meters which would provide such an incentive is too great in the majority of cases for people to contemplate it, is there not a case for the water authorities to consider whether they might be able to reduce that cost to a figure perhaps below the immediate cost of providing meters? In the long run, that might work out more cheaply than the kind of capital investment which is needed to provide a greater supply.

.Mr Gow: My hon. Friend knows that every water authority and water company offers to its domestic consumers as an option the metering of water. The effect of water metering on consumption is not as great as my hon. Friend may think.

Mr. D. N. Campbell-Savours: By trying to run this industry on the cheap and by cutting the investment programme, is it not clear that the Government have effectively inconvenienced people this summer? Is the Minister aware that Thirlmere, in my constituency, and other lakes have been watched by my constituents over the past four months? We knew as early as April this year—and this summer has been one of the hottest in living memory in the Lake District—that there would be a water shortage. How is it that we knew and yet the Government did not? Is not that an indication of the Government's complacency in this matter?.

Mr. Gow: There has been absolutely no complacency on the part of the Government. If the hon. Gentleman is able to say that he knows precisely what will be the level of rainfall in the future, he has powers which are denied to the rest of us.

Mr. Simon Coombs: Bearing in mind what my hon. Friend says about the north-west of England and the action to be taken by the North West water authority, can he say whether the Liverpool international garden festival is likely to be a major casualty of these obviously necessary restrictions?
Can my hon. Friend also say what is the position of areas a little nearer to London than the far south-west such as Wiltshire, Somerset and Dorset and whether they are likely to be affected in the same way in the near future, assuming that there is no change in the weather?.

Mr. Gow: I hope that the garden festival will not suffer.
There is some shortage in other regions of the country other than the north-west and the south-west, but the shortage there is not nearly so serious.

Mr. Tom Clarke: Is it not a matter of constant amazement in other countries, the annual rainfalls of which are considerably less than ours, that we should have to meet a crisis after a few weeks of dry weather? Is there not a case for bringing our reservoirs up

to date and for renewing our outdated Victorian sewerage plants to give jobs to construction workers who desperately need them?.

Mr. Gow: There has been and there is substantial investment in the water supply industry. I fully understand the hon. Gentleman's point and it is always possible to ask for yet more investment. I should like to list some of the achievements that have been made since 1976. The Lancashire conjunctive use scheme in the north-west and the Brenig reservoir are both in operation, in Northumbria there is the Kielder reservoir, in the Severn Trent water authority area there is the Shropshire groundwater scheme and the Wye abstraction scheme, in the Yorkshire water authority area there is the Winscar reservoir and in the Anglia water authority area there is the Rutland water scheme. There is also the Farmoor reservoir, the Ardingly reservoir in the Southern water authority area, new boreholes and link mains in the Bristol, Avon, Avon and Dorset and Somerset river basins and the two new reservoirs in the south-west to which I have already referred. They are all improvements that have been made since the drought of 1976.

Mr. Greg Knight: Irrespective of whether there are restrictions in an area at the moment, does my hon. Friend agree that it makes sense for everyone to do their utmost to conserve water supplies? Is it therefore not something of a disgrace that a company in Grosvenor place was apparently using thousands of gallons of water this morning to clean a building?.

Mr. Gow: There are at present no restrictions in London, but I entirely agree with my hon. Friend. It is important, as I said in my statement and in response to a private notice question earlier this month, that everyone should use water sensibly and economically. If people respond to the advice of water authorities, there is a real prospect of our being able to avoid more serious restrictions later.

Mr. Robert C. Brown: Is the Minister aware that, in the north-east of England where we have had no measurable rainfall for more than four months, we have no problem thanks to the farsightedness of the former Northumbria river authority which was Labour controlled? Because of its farsightedness and that of the Labour Government who provided capital to get Kielder into operation, the three main rivers of the area—the Tyne, the Wear and the Tees—are linked. Surely the abolition of the National Water Council, for which the Government are responsible, has not made it any easier to develop a national grid system, which is sadly needed.

Mr. Gow: As I said earlier this month in response to a private notice question, the Government have no plans to introduce a grid system any more than did the previous Labour Government.

Mr. Nigel Spearing: Do not these events show the importance of proper public capital investment, especially when plant, men and machinery are readily available? The Minister said that the Government are not complacent. Is he saying that he has agreed to every capital scheme for storage that has been put up by water authorities since 1979? If he has not agreed to any such applications, why did he turn them down?.

Mr. Gow: Resources for investment in the public sector are not unlimited, but there has been substantial investment. Some parts of the country have experienced the driest first seven months of the year since records began. The exceptional drought is responsible for the restrictions that have been imposed in the north-west, Devon and the south-west.

Mr. Jack Straw: Is the Minister aware that we have been advised that there is a danger, when reservoir levels get extremely low, of Weil's disease—a virulent form of glandular fever — which can affect young children who play on river banks? What advice has the Minister received about that from Government medical officers? What advice will be given to water authorities to prevent it? We have noted the Minister's reluctance to come clean about the cuts in water authority budgets which the Government have imposed.
We are delighted that the Minister read a long list of schemes, almost all of which were instituted by a Labour Government. Will he confirm that virtually none of those schemes would have gone ahead if they had been applied for under the present Government because of cuts in spending and water authorities' budgets? Is the Minister aware that the £230 million of capital expenditure on water projects shows that such expenditure has been cut by more than 40 per cent. since 1979? For every £10 that Labour spent on water investment, in real terms, the Government have committed only £6.
The Minister talked about the lack of capital resources but is it not a higher priority to develop decent water resources than to encourage the shipping abroad of £1 billion a month for investment on the Hong Kong, Japanese, or Wall street stock exchanges? Whis is the higher priority? Is it not the case that millions of people at home, on holiday and at work risk having their health jeopardised, their holidays ruined and their jobs put at risk not because of the acts of the Almighty but because of doctrinaire cuts in public expenditure that have seriously damaged a vital British industry?.

Mr. Gow: The cause of the water shortage in the southwest and the north-west is the exceptional drought. In many areas it is without precedent in living memory. Water authorities are well aware that, in some cases, they must take special precautions to preserve health in the event of a fall in the level of reservoirs and rivers. The level of investment in the water industry during the past five years has been justified in the circumstances. Only the exceptional drought has made it necessary to impose restrictions. I am confident that water authorities and water companies will take all prudent steps to safeguard future supplies and to minimise hardship for their customers.

Caribbean Development Bank

The Minister for Overseas Development (Mr. Timothy Raison): I beg to move,
That the draft Caribbean Development Bank (Further Payments) Order 1984, which was laid before this House on 9th July, be approved.
The purpose of the order is to provide for the payment of a further contribution of something over £6 million to the special development fund of the Caribbean Development bank which is the bank's concessional lending window. With your permission, Mr. Speaker, I propose to say a word or two about the bank and the way in which it works before describing the order in detail.
When the federation of West Indies broke up in the early 1960s and an attempt at forming a federation of the Little Eight — Barbados, Dominica, Grenada, St. Vincent, St. Lucia, Antigua, St. Kitts Nevis, Anguilla and Montserrat—failed, the United Kingdom, Canada and the United States of America set up a team of experts to make an economic survey of Barbados and the Windward and Leeward Islands with a view to formulating plans for the achievement of their economic viability. This was in January 1966. Among the recommendations of this team was the establishment of a regional development agency including a development bank division to serve the territories.
Later in that year, in November 1966, a conference of the sponsors of the survey and representatives of the Governments of Barbados and the Windward and Leeward Islands met in Antigua to consider the report. It was agreed that consideration should be given to the establishment of an institution to serve all the Commonwealth Caribbean countries and territories.
With the concurrence of all the Commonwealth countries in the region, the United Nations development programme appointed a team of experts to undertake a study. The UNDP report was submitted in 1967 and recommended the establishment of a Caribbean Development bank with an initial capital of US $50 million. The recommendation was accepted at a meeting of the heads of Government of the Commonwealth Caribbean countries held in Barbados in October 1967 and a Committee of officials was established to work out the details and prepare a draft agreement. That agreement was eventually signed at Kingston, Jamaica, on 18 October 1969 at a conference of 16 Commonwealth Caribbean regional countries and territories, Canada and the United Kingdom. Thus the Caribbean Development bank was founded, with the UK as one of its founder members.
The regional members of the bank are all member countries of the Commonwealth, as are the two major non-regional members, Canada and the UK. The bank's charter outlines clearly the main purpose of the institution, which is
to contribute to the harmonious economic growth and development of the member countries in the Caribbean and to promote economic co-operation and integration among them, having special and urgent regard to the needs of the less developed members of the Region".
To achieve that purpose, CDB's functions include assisting regional members in the co-ordination of their development programmes, mobilising financial resources, financing projects and programmes, providing technical assistance to its regional members, and promoting public and private investment in development projects.
The bank is in its 15th year of operations and is widely recognised as having served the region well. Since its inception, the bank has approved projects in borrowing member countries amounting to US $463·5 million. A total of 54·7 per cent. of the financing has gone to the less developed countries. Disbursements have averaged over US $47 million a year for the five years 1979–83. The bank has not only gained the confidence of its original membership. but has attracted new members and contributions both from within the region and outside.
The CDB's original membership included 16 English-speaking Caribbean countries as regional borrowing members and Canada and the United Kingdom as non-borrowing, non-regional members. Anguilla was accepted into membership in 1982 following formal separation from St. Kitts and Nevis. Venezuela, in 1973, Colombia, in 1974, and Mexico, in 1982, subsequently joined as non-borrowing regional members and France, in 1983, joined as a non-borrowing non-regional member. Italy's application for membership is currently under consideration. In addition, the United States, Sweden, Nigeria, New Zealand and Germany are all contributors to the bank's resources. Of total resources of US$479·9 million held by the bank at December 31 1983, some 75 per cent. was mobilised from outside the Commonwealth Caribbean.
The financial resources of the bank now consist of ordinary capital resources, comprising mainly subscribed capital, and borrowings from the international financial markets, and special fund resources, which are contributed by members and non-members and lent at very concessional rates of interest, mainly to the LDCs of the region. Britain holds 14 per cent. of the issued capital, an identical holding to Canada. That amounts to some US$34·7 million of which US$7·925 million is paid in and the rest is callable. We also contribute to the soft resources. The current United Kingdom commitment is £14·2 million, of which some £9 million has been disbursed.
As a member of the bank, we qualify for procurement under ordinary capital resources. Special funds can be used for the procurement of goods or services from those countries, which make substantial contributions to the fund — that is, over $5 million. United Kingdom procurement in recent years has been good. In 1981, it was 25 per cent. of OCR expenditure, although our share did fall in 1982 following completion of several large projects in Guyana, St. Kitts-Nevis and Montserrat, the supplies for which were obtained from the United Kingdom. Britain is also of course represented, by me, on the governing board of the bank and on the board of directors, where we control 13·8 per cent. of the directors' votes.
A recent feature of the economies of the countries of the Caribbean has been the wide variation in performance. For some there has been steady growth, for others sluggish growth, and for a few, decline.
The 1983 annual report of the CDB helps to illustrate some of the problems of the region:
Reflecting low international demand, commodity prices remained depressed and currency market developments and the differential in economic growth rates between the US and Europe had some negative effects on domestic earnings in the Region. Demand for bauxite and petroleum continued to stagnate as a result of both the world recession and of longer term structural factors in the markets for these two commodities. As regards tourism, while there was a noticeable increase in stop-over visitor arrivals from the US, arrivals from Europe and Canada declined. While the size of the increase in arrivals from the US was sufficient in many cases to result in an overall increase in visitor

arrivals, total visitor expenditure was affected by the shatter average length of stay of visitors. The situation was more serious with respect to exports of sugar, bananas, spices and other commodities to Europe. In spite of substantial output increases in some cases and upward movements in prices in others, earnings in domestic currencies tied to the dollar increased marginally or not at all. In this environment, 1983 was a bad year for those borrowing members which experienced declines in export volumes.
Apart from the generally depressive effects on domestic output of the acute difficulties in the foreign exchange earnings sectors, poor overall economic performance also reflected the continuing strong external bias in regional consumption patterns, as well as inadequate development of local marketing and support structures for regional production, particularly in the area of food crops.
The strategy of the bank is to seek projects that will increase output in the short term and promote productive sectors of the economy. We believe that that is right, and also that in the public sector, projects that can reduce the burden of recurrent expenditure and encourage the maintenance of existing assets should be given priority.
Britain recognises the valuable role played by the hank as financier of public and private sector investments that are particularly relevant to the development needs of the Commonwealth Caribbean. For the most part, those are outside the scope of commercial banking loans. The Caribbean Development bank, with its cadre of professional and technical expertise, can prepare development projects across a wide spectrum in countries where professional expertise is limited. That paves the way for financial assistance from either the bank or other lending agencies.
The bank also finances small projects that are essential to the island communities, but which are too small for major development banks, such as the World Bank group, to consider.
The bank varies both its lending criteria and the terms of its lending in accordance with the economic circumstances of the borrower.
In the case of the new SDF, it is proposed that those countries with relatively more developed economies, such as Trinidad and Tobago and the Bahamas, should be eligible for assistance for lines of credit to development finance corporations at 8 per cent. interest, 20 years' maturity and five years' grace. Countries with less developed economies, such as Dominica and St. Vincent, qualify for direct loans to Government as well as lines of credit to development finance corporations for on-lending to the private sector. SDF loans to those countries will be at 3 per cent. interest over 30 years, with 10 years' grace. The average term of SDF lending is currently 4 per cent. interest, 22years' maturity and five years' grace. Under the new proposals, with the large bulk of SDF lending going to the less developed countries, average repayments will be extended to 28 years, with an average grace period of nearly 10 years.
I have arranged for a copy of the bank's annual report for 1983 to be placed in the House of Commons Library.
The purpose of the order is to authorise paynment of a further contribution to the special development fund to accordance with the pledge made by Britain at a meeting of contributors held on 28 October 1983. Total pledges of US$76 million were received.
A major problem for CDB has been the myriad of special funds for soft resources due to a number of donors specifying terms and conditions under which their contributions may be spent. The 1983 board of governors


meeting agreed to establish a unified special development fund with effect from 1 January 1984, and to encourage as many donors as possible to contribute to it. The unified fund includes as far as possible all outstanding commitments to soft resources — including some £5 million from the United Kingdom — and the new commitments pledged at a meeting in October 1983.
The special development fund provides loans of high development priority, with longer maturities, longer deferred commencement of repayment, and lower interest rates than those determined by the bank in its ordinary operations. The projects which might be eligible for SDF funding are those with low financial rates of return but which are of high developmental priority or which are not financially self-liquidating, except in the long term. Water and sewerage, road construction, and rural electrification are examples of those.
The special development fund, because it provides funds at such concessional rates, is not self-liquidating, and all contributions to the fund by donors are in the form of grants. Existing contributions to the SDF are expected to be fully committed in 1984. The current economic climate means that the poorer borrowing members of the bank are finding it increasingly difficult to secure and service loans at normal interest rates, but they still require financing for projects of high developmental priority. Replenishment is required to allow the bank to meet those needs in the Commonwealth Caribbean up to 1988. The bank proposes that not less than 70 per cent. of the special development fund resources should go to the less developed countries of the region.
To date, Britain has pledged US$30 million to the special development fund. At varying exchange rates, it equates to just under £14 ¼ million. We have now agreed to a further contribution of US$10 million. If Parliament accepts this, the United Kingdom will subscribe £6,640,300 to the special development fund—equivalent to US$10 million at a fixed rate of £0·66403.
Therefore, I commend the order to the House in the firm belief that the Caribbean Development bank will continue to promote economic and social progress in the Commonwealth Caribbean, and that the United Kingdom should play its part in this.

Mr. Stuart Holland: We are grateful to the Minister for his introduction of the order and for the wide-ranging way in which he has analysed the context of the Caribbean Development bank and its lending.
It is clear from "British Overseas Aid", in its 1982 and 1983 versions — the same words are used on each occasion—that
the main constraint on development in these countries is the narrow base of their small economies, coupled with the continuing effects of the world recession.
It is also clear that regional and sub-regional development banks have a positive role to play in complementing other international lending agencies. As put by Jeremy Morse and others in "Towards a new Bretton Woods", they
enjoy certain advantages over the World Bank. They have a greater knowledge of their respective areas and the developing countries themselves play a relatively larger role in their operations and decision making.
Such sub-regional banks also are often active in the promotion of economic integration and co-operation. I

think that the CARICOM context of the Caribbean Development bank's operations is relevant, and I may say something on that later.
In its 1983 report the bank stresses clearly the international crisis and the context of that crisis in handicapping its operations and lending. As it puts it, the OECD economies being deep in recession
part of the reason for the slow recovery in Europe, despite improvement of the trading accounts, has been a fear of potentially inflationary consequences of fiscal reflation.
It goes on:
These restrictive fiscal and monetary policies in the OECD countries, together with high US interest rates and the reluctance of the international banking system to continue to lend to less developed countries at former levels, given recent payments difficulties and debt rescheduling crises in Eastern Europe, Africa, and Latin America, have continued to be reflected in poor performance in the economies of less developed countries.
It then says that the economic performance of the bank's borrowing member countries therefore reflected a combination of external and internal factors, with generally negative influences leading to little or no overall growth in the region. Substantially because of that, the bank stresses in its report that
Public sector finances in most of the Bank's borrowing members were seriously affected by the unfavourable economic situation.
On the other hand
the measures taken to restrain public expenditure had their inevitable consequence of increased unemployment. Slow revenue growth, as a result of insufficient foreign exchange for the purchase of dutiable imports, poor private sector profits"—
showing that it is not simply a public sector matter—
and low export earnings, together with continuing high current expenditure levels led to increased public sector deficits.
In other words, the regional economy of the Caribbean is itself dependent on the activity and development of the global economy. It is not simply a matter of the Club Mediterranee or of the tourism industry from Europe to the region. It also affects the demand for bauxite or petroleum, as the Minister pointed out.
Where does this leave the bank in its operations? As it states in its report:
The continuing difficult economic circumstances of the member States has resulted in endeavours to resolve crises rather than to formulate and implement larger-term development strategies.
In other words, the bank is into crisis management rather than into development strategy. We see this reflected in the statement made on 16 May on the use of Commonwealth Development bank funds by the Prime Minister of Jamaica, Mr. Edward Seaga, who suggested that it should
use some of its expected surplus resources from new donor members to refinance short-term commercial debts.
At the opening of that meeting, Mr. Seaga noted that
the debt burden faced by regional countries and their inability to attract new and significant commercial bank credits was serious
He also said that
at the same time, the International Monetary Fund, to which many countries"—
indeed, his own —
have turned for help, lacked adequate resources and could not be expected to provide lasting solutions to the region's ills.
One would think that, relative to the overall needs of the Caribbean, the IMF might be able to help. However, it is on the terms and conditions on which the IMF is prepared to help that the problems arise. Highly relevant to the operations of the bank and the measures which we are considering was the statement by Mr. Seaga about the surplus resources that it would have. He said:


Many of its Members would be either unable or unwilling to borrow because their debt servicing capabilities were at their maximum.
He went on to say that one suggestion he would make was doubtless almost heretical; that the Commonwealth Development Bank use some of the resources which it may be able to lend to borrowing countries to finance projects, to refinance instead existing short-term commercial debt.
Therefore, the Caribbean is in the same position as Latin America— the development banks are being forced to provide "Band-aid" in the short-term against the haemorrhage of debt in a global economic crisis with the most severe regional implications.
I do not know whether the Minister approves of the bank's funds being used to refinance short-term debt. However, it is clear that such a move cannot do more than ease difficulties in the very short term. A country with special responsibilities to the bank, and a Government with an Overseas Development Administration such as ours, must address the more fundamental problems of the region rather than simply reschedule renewals on so minor a scale as those in the order.
The governors of the bank concluded their meeting on 17 May by expressing agreement on the urgent need to implement measures of structural adjustment in the region. The economist Mr. William Demas, re-elected to a third five-year term as the bank's president, said that the Caribbean economies must undertake urgent reforms if the region is to confront the problems associated mainly with widening balance of payments and deficits. He said:
But it will be a forced march towards development…let's face facts, structural adjustment lowers the living standard of everyone.
What is structural adjustment? In practice, it is a euphemism for deflation and for cutting the very public expenditure which, in countries at that level of development, is crucial to the difference between development and depression. Such structural adjustment is not a remedy; it undermines the feasibility of effective recovery. Slow revenue growth as a result of insufficient foreign exchange for the purchase of dutiable imports, low private sector profits and low export earnings are in the litany of complaints made by those involved in the operation of the bank, who are clearly in a desparate position.
It is only three years ago since Mr. Seaga saw the International Monetary Fund as a fundamental part of the island's financial future, and the terms and conditions of the lending of that fund are reflected in the operations of the bank. During those three years he appears to have learnt a lesson about the consequences of monetarist policies. I hope that the Minister will be sympathetic towards the lesson, at least for a region as far away as the Caribbean.
When the conference asked the IMF to extend a loan facility at the beginning of this month, when it said that the indebtedness of Caribbean countries and those in other parts of the developing world is such that most debtor countries are unable to cope, the fund agreed in principle to proposals from the bank for structural measures that amount to a greater role for the private sector, changes in exchange rate—which is an euphemism for devaluation — moves to reduce import bills and cut domestic consumption and an increased focus on exports.
We have to ask where the exports will be sold. I am sure that the Minister is as worried about that as I am. What is the economic rationale, from what Nobel prize winner in

economics did we hear that each individual country, by cutting its imports, can increase its export market? It is the economists' old adage, ceteris paribus, gone mad. The IMF's philosophy is based on pretending that the rest of the world is not there when cuts are imposed on an individual economy.
Deflation plus devaluation does two things. Since one country's imports are another's exports, import restraint cuts total world export trade. Cuts which a Government can undertake relate almost exclusively to public expenditure and public spending cuts hit those least advantaged rather than the more advantaged and privileged. If we want to shift resources towards the less developed countries in the region and to the least privileged within the least developed countries, the bank's policy will not work. The order is only a small part of that policy and it will not succeed.
How can CARICOM help on the export side? According to the Financial Times the Ministers concerned believe that the real difficulty is in long-term financing for trade. They considered a proposal for the region's central banks to make a joint approach to international financial institutions for $50 million and $100 million to provide trade credits.
Trade credits are excellent for less developed countries. We should support those credits to enable institutions which do not have the financial muscle and strength of those in the developed countries to assist indigenous enterprises in less developed countries to export. But an export credit alone is as useful for development as pushing on a piece of string if there is no demand for exports. Also there is no point in offering lower interest rates in themselves. Lower interest rates are important, indeed crucial, for the feasibility of the repayment of debt for many Latin American countries. All possible measures should be taken to ensure a limitation of overall interest rates, especially for the borrowers in the Caribbean region. However, neither trade credits nor lower interest rates of themselves will permit the recovery, which can come only from an improvement in overall export demand—and that goes wider than the region itself.
It is interesting that countries such as Mexico and Venezuela are non-borrowing donors. Since Mexico and Venezuela are in a subscribing position have the Governments involved considered whether it is meaningful to look at the bank's operations for the wider region as a whole? Have they considered involving central America as a whole since the bank cannot find takers for its loans under present conditions in the Caribbean? Some countries in the Caribbean and central American regions have demands for loans which cannot be satisfied by the World Bank or the IMF. One such country is Nicaragua. What moves and proposals have been made, and what would the Minister's response be to any moves, towards an application from a country such as Nicaragua which, after all, has a Caribbean seaboard?
Another question must be raised in the context of the points made by Morse and others on the relationship between the role of regional development banks and the wider funding of the IMF or the World Bank. Have the Government considered regionalising SDRs? If we cannot get an adequate global increase in special drawing rights and there is a recognised role for regional development operations and for such regional development banks—and hon. Members on both sides of the House appear to think that there is—why cannot there be the provision


of a regionalised special drawing right? As with SDRs generally, the advantage lies not simply in the funds that are available from an SDR drawing but in the fact that the conditionality—as we have come to know it through the night visitors from the IMF—is not imposed on an SDR borrowing.
Therefore, countries with special development needs may undertake local expenditure on housing, health, education or other social development programmes, or allocate the money to a basic needs approach to development instead of assuming that in the long term, when many such countries will be bankrupt, there may be a future in which the generation of export earnings will have a trickle-down effect enabling people to afford private housing, health or education. That is the case for regional SDRs and it is a special case, related to development needs. There is a case, precisely because there would not be the same conditionality as we have seen with such negative consequences through the operations of the IMF.
The plain fact is that the IMF has now made a major contribution to the global slump. There is no point simply helping the small banks to help themselves if we do not confront the issue of global deflation which has been imposed by the bigger bank—the IMF.
But this must also be seen against the background of cuts in aid expenditure as a proportion of gross national product. I managed to obtain the current issue of "British Overseas Aid" from the Library. I am sure that the fact that I had not seen a copy of it was an oversight on the part of the ODA. It shows that about £1·5 million of gross bilateral aid for 1983 was unallocated in respect of the West Indies. We appreciate that there are specific reasons for unallocated aid, but the fact remains that overall aid is being cut.
I have raised that point before in the House, but the Minister was not present. Hon. Members on both sides of the House will thus be interested in the Minister's response to the now published figures on aid expenditure. The figure has fallen from 0·52 per cent. of 1 per cent. of GNP in 1979, to 0·35 per cent. in 1980, 0·44 per cent. in 1981, 0·37 per cent., on the revised figures, in f1982, and now to 0·35 per cent.
However much the Minister may say that he has the interests of development or of the region at heart, the fact remains that under his stewardship aid expenditure as a proportion of our GNP is half the recommended United Nations target, or half the target recommended by the Brandt Commission. Far from its downward fall bottoming out, as he has suggested, it has gone down consistently between 1981 and 1983. It appears to be about to sink ingloriously below the level it reached in 1980.
In the Caribbean the allocations of aid per caput show enormous variations. In 1982 the Turks and Caicos islands received £788 per head. The misbegotten Club Mediterranéee venture provides specific reasons for that. There are also special reasons in the case of Anguilla. But the distribution of aid within the regions becomes an important issue when one considers countries such as Dominica and St. Kitts-Nevis, where the aid per head is around £20 or more, and St. Lucia and St. Vincent where the aid per head is between £9 and £10, and compares those figures with the aid of only 71p per head for countries such as Grenada. It is important for the House

to know to what extent the Caribbean Development bank is addressing itself to that question and what contribution it can make on such matters.
The response so far from the Government to the economic crisis in the region has been inadequate. There is a statutory obligation on the Minister to bring forward an order. Simply to describe the bank's background and its institutions without analysing the crisis, simply to stress and restate in the current edition of "British Overseas Aid" in exactly the same words as last year that the problems of the region are the result of too narrow a production base, without addressing oneself to the recovery argument is not good enough. They should be in the business of development rather than in the business of distributing cuts.
What can be done about it? The Government cannot offer an alternative in the region. Their approach amounts to the discredited IMF formula—"If at first you do not succeed, cut, cut and cut again." That is not a development response. I suggest a response, based on arguments recently endorsed by the party leaders of the Socialist International at its recent conference in Sheffield, which would offer some chance of a global development context within which the operations of the Caribbean Development bank and other regional banks could become meaningful. The reallocation of as little as one tenth of the world's annual arms expenditure, now running at $1 trillion a year, could create jobs in a recovery programme, allowing individual member countries to choose their spending priorities and to decide how to recover their import trade and thereby other countries' export trade. There should be a "better my neighbour" spending and trading programme as opposed to the "beggar my neighbour" deflation of current policies.
That approach could not only create millions of jobs in the north but could vastly improve the export and development project of the south. An example of the committed interests of trade unions in Third world development is that the Scandinavian trade union federation has estimated what would happen if OECD countries were to achieve the 0·7 per cent. of GNP United Nations target. It is an indictment of the Government's aid record that there are countries in northern Europe that give more than 0·7 per cent. of their GNP in aid. If there were a major increase in aid for the less developed countries, 2 million jobs could be created in the OECD countries, while fulfilling the United Nations target, and a massive new transfer of aid to the south could take place.
Ironically, that would also sustain the United States recovery, which at present is threatening to blow out, with negative consequences for the exports not only of less developed countries in general but of the Caribbean in particular. It would sustain the United States visible exports by up to 4 to 5 per cent. a year and possibly add 1 per cent. a year to United States GDP. Re-allocating one tenth of what the world spends each year on armaments could enable the less developed countries to add over 20 per cent. to their gross national product within five years. It could enable the less developed countries to increase their visible export trade by 4 to 5 per cent. a year, thereby making it possible through recovery for them to put the brunt of the debt crisis behind them not in 10 or 15 years but in five years.
The Government have a major responsibility. This matter concerns not only the Chancellor of the Exchequer but the Minister for Overseas Development. If he is


interested in fighting for development aid and for trade, he will have to explain to the House how he is arguing for recovery within the Government. When recovery proposals came at the New Delhi summit in November last year, when they were made by the Commonwealth countries, it was this Government and this Prime Minister who blocked those plans.
Recovery proposals were made in the European context, which, as the Caribbean Development bank has stressed, is crucial to the exports of the Caribbean. They were made by Prime Minister Andreas Papandreou at the Athens summit, and it was again this Government and this Prime Minister who blocked the recovery. Throughout this spring, and again at the Fontainebleau summit, we have seen that when arguments for recovery are made, the Government block them. At the world industrial summit, the French Finance Minister, Mr. Jacques Delors, who I am now glad to see is now President of the European Commission, walked out because this Government, among others, would not seriously enter into the recovery arguments.
This country, on a global scale, by blocking the initiatives of the Commonwealth and the EEC, is imposing under-development on Third world and Caribbean countries. There are serious arguments, to which the Government are failing to address themselves. As long as they fail to do so, regrettably, increases represented by orders such as this will be "Band-aid" when the slump in the north as well as in the south amputates the regional economy of the Caribbean.

Mr. Tom Clarke: I join my hon. Friend the Member for Vauxhall (Mr. Holland) in suggesting that the order has to be seen against the recent background in the Caribbean and overseas aid matters. As my hon. Friend said, we have seen the recent positive outcome from the CARICOM summit in Nassau. Against that, most hon. Members must have been profoundly disappointed by the publication this week of the glossy document, covering a multitude of lethargies, called "British Overseas Aid 1983". The Caribbean section of the document offers no more hope than the rest of it. It suggests that the Government's priorities lie much more with defence and armament expenditure than with the appalling problems of world poverty and deprivation, not least in the Caribbean.
The day when the Prime Minister assumed office she stood on the steps of 10 Downing street and recited from works by St. Francis of Assisi. All hon. Members know that within a few weeks the overseas aid programme was cut by £50 million. St. Francis of Assisi has certainly not become a particularly popular figure with the Prime Minister since then. I noticed the Minister shake his head in disagreement with my hon. Friend the Member for Vauxhall (Mr. Holland) — but we have seen a clear reduction in real terms of our overseas expenditure. If the Minister disagrees, he should have a word with the Library. It provided me, and no doubt other hon. Members, with figures based on the Government's own deflator which suggest that since 1978 the net development assistance figure has stood at £1,048 million. It has now decreased in real terms based on the Government's method of calculation to £839 million. For the House that is disappointing, but for many millions of people it would not be an exaggeration to say that it is a catastrophe. The

Government are not attempting to achieve the United Nations' figure of 0·7 per cent. It is clear that the Government do not accept that figure. They owe it to the House and to the United Nations to admit that that is so.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I hesitate to interrupt the hon. Member, but we are debating an order. His speech should concentrate on the desirability or otherwise of the further payments specified in the order. I hope that he will relate what he is saying directly to the order.

Mr. Clarke: I am grateful for your advice, Mr. Deputy Speaker. I shall do my best to adhere to it. I have been trying to do what I believe the British people would want the House to do, and that is to relate the order to the reality of poverty in the Caribbean.
The evidence, even in the order, is that the Government are being highly selective in a way which is unacceptable to us and to the people of the Caribbean. The figure of 71p per head for Grenada is outrageous. It is consistent with the Government's attitude in the European Community, where they delayed the aid contribution to Nicaragua, where, as my hon. Friend the Member for Vauxhall reminded us, there is a Caribbean seaboard.
We must ask the Minister why he is ignoring the lessons of the Caribbean and especially of Greanada. The aid that the Government are giving is largely for policing and not for development. The Government's policies have created a vacuum there. Maurice Bishop rushed to Cuba and the Soviet Union rather unwisely because of attitudes such as have influenced the Minister in his presentation of the order. Considering the invasion of Grenada—I invite the Minister to give the House his view on this—I was astonished to read in the press this week that the United States apparently believes that if Sir Eric Gairy were restored after the elections, it will consider whether to continue with overseas aid. That is deplorable, and the order that we are being asked to consider becomes almost meaningless in the light of those events. I am not in the least anti-American; I am merely pro-Commonwealth. As part of the British Commonwealth, we have responsibilities which are not reflected in the thinking of the Minister or of his Department, and it is right to remind him of those responsibilities during the debate.
The order covers Belize, and I ask the Minister to tell the House exactly how the Government envisage their role in Belize. I asked a similar question during the debate on Grenada of the Parliamentary Under-Secretary of State for the Foreign and Commonwealth Office, who did not have time to reply. However, I am grateful for the fact that he wrote to me later. One sentence of the letter read:
I agree with the implication of your question that the British presence does make a contribution to the security of the region. Nevertheless, we naturally wish to see as soon as possible conditions in which it can safely be withdrawn.
That is an ambivalent statement. There is little point in giving aid to Belize, much as I support it and would wish it to be increased, if there is doubt in the minds of Guatemala, Cuba and even the United States about what a British presence means. I invite the Minister to clarify what I regard as a serious matter.
The other day, The Guardian said this about development and aid in the Third world:
If we have not yet managed to find a way to get some of our indefensible food surpluses to our own disadvantaged fellow citizens, it is hardly surprising that we have also failed to alleviate the hunger of the Third world.


That is true. The order lacks any progressive inspirational thought and should be criticised on those grounds.

Mr. Raison: Is the hon. Gentleman saying that we should send massive food aid to the Caribbean? Does he believe that that would be in the interests of the Caribbean?.

Mr. Clarke: I thought that I had made it clear that there is a variety of demands in the Caribbean, as elsewhere, but the Government are not responding to those demands as they arise. The Minister should not try to put words into my mouth. I did not for a moment suggest what he said. However, I suggest that in the Caribbean, as elsewhere, the Government's response—I regret to have to say this to the Minister, who had a fairly progressive record in other Departments — to the needs as they arise is inadequate.
I fear that the Minister might take the view that he does because he, in common with the Prime Minister, believes that the British people are not worried about the problem. That is not the case. The House will recall that, when the Brandt report was published, 10,000 people lobbied Parliament—one of the biggest lobbies in the history of this assembly. Night after night, people see on their television screens the problems of poverty, deprivation and world health, and they expect a more positive response from the Government than we have had. The problems of world poverty, including those in the Caribbean and, in a wider sense, in central America, present a greater threat to world peace than does any other consideration.
For those reasons, I invite the Minister to reconsider the policies that he has supported, which represent a very weak aspect of the Government's current approach.

Mr. Bowen Wells: I welcome the order and the important support that it gives to the Caribbean Development bank. The hon. Member for Monklands, West (Mr. Clarke) made some global points about aid and how it should be increased.
The hon. Gentleman knows that my right hon. Friend and hon. Friends and I share his concern about the poverty, starvation and underdevelopment of our fellow human beings elsewhere in the world. However, I differ profoundly with him on how we should go about curing the problem. I shall make the theme of my contribution that the curing of the problem has both an internal or domestic element which is in the hands of the people of the Caribbean and an external element to which this order makes a valuable contribution.
Perhaps I might answer one of the points made by the hon. Member for Monklands, West. He said that Grenada was one of the casualties of this Government's aid policy. If we concentrate on the order as you have requested, Mr. Deputy Speaker, we must remember that one of the events that occurred during the rule of Maurice Bishop and his revolutionary Government was that aid from the British aid budget continued to Grenada, especially through the Caribbean Development bank. The bank continued to invest in Grenada, and in the bank's current report we see a picture of the port development in Grenada which was carried out under the auspices of the bank. What is more, the banana programme under our bilateral aid continued. The eradication of the banana diseases was continued throughout that period.

Mr. Jeremy Corbyn:: Does not the hon. Gentleman accept that during the period in which the New Jewel movement formed the Government of Grenada there was a significant reduction in British aid and a great degree of hostility from the British Government towards the economic plans of the Government of Grenada?.

Mr. Wells: The problems in Grenada during the revolutionary Government's regime were considerable in terms of human rights and in terms of whether that Government would ever hold an election. An election was promised; it was never held. During that time more than 200 political prisoners were detained in very bad conditions without trial and not allowed to see their relatives or friends. It was not the kind of Government that the House would wish to see the funds of ordinary British citizens going to support. But we continued to try to help ordinary people in Grenada by providing fertilisers, pesticides and fungus eradication measures to the banana industry. We continued our investment in schools and investment through the Caribbean Development bank.

Mr. Russell Johnston: Although I agree with the hon. Gentleman about the regime, and while there was some diminution in the British contribution, it was not all that considerable. However, the withdrawal of United States aid in 1979 and the withdrawal of aid from some other countries undoubtedly contributed to moving Bishop into a position where he had no alternative but to depend on support from the USSR and other countries.

Mr. Wells: The idea that we drove Maurice Bishop into the hands of the Cubans and the Russians is quite erroneous. The Government under Maurice Bishop were already under the sponsorship of the Cuban Government. Indeed, the Cubans trained Maurice Bishop to overthrow by force, although it was a bloodless coup, the elected Government of Grenada. Bishop went immediately to Cuba for assistance. He was not driven into the arms of Cuba. His arm was linked with Cuba's throughout that period. That myth should not be continued.
The British Government's position is that we did not put additional money into Grenada, but we continued the independence gift and its disbursement. American aid was not continued after the 1979 coup. That is hardly surprising in the light of the rhetoric of the revolutionary Government, who were not disposed to be friendly to the United States Government.
I have had some difficulty preparing notes for the debate. I asked the Department for some briefing material, which I did not receive, and I asked the Library for a copy of the report and some briefing. I obtained, with great difficulty, a copy of the report, but its return was demanded. You have already complained about our wandering into a discussion of overseas aid, Mr. Deputy Speaker, but if our debates are to be informed and properly strctured we should be told why the Government are introducing the order and be given the background information that is necessary to debate the issue properly.
I should like to raise a technical matter on the Estimates with the Minister. The Estimates are scrutinised carefully by the Select Committee on Foreign Affairs of which I have the honour to be a member. Our report has been published. We asked for evidence from the Department on what it thought it would have to disburse under the multilateral and capital assistance programme. It gave us


the table which appears on page 10 of the report. The Department lists the United Kingdom commitment to the special development fund but fails to list additional cash that is to be distributed in 1984–85. It says that there is:
No indication yet of need for supplementary provision in 1984–85.
My right hon. Friend the Minister said this morning that the pledge to make another subscription at that level was entered into on 28 October 1983—before the Estimates for 1984–85 had been printed. In the light of the figures that have been presented to the Foreign Affairs Select Committee, it appears that the Department has not been as frank as it should have been with the House. I recognise that this is a small matter, but the Committee and the House should worry about the accuracy of the Estimates that are presented to us for approval. Technically, the Department does not have the authority to spend the money. It must rely on that good old friend the unallocated provision.

Mr. Raison: I am today asking the House for authority to spend the money.

Mr. Wells: I accept that. However, the projection should be included in the Estimates for multilateral aid. The note is specific. It says that there is no indication that there will be an additional aid requirement under that heading. My complaint arises from the fact that the budget will be kept within cash limits by using the unallocated reserve. The Department must reduce that reserve to the minimum. It could have forecast that the order would be presented and that the money would have to be found in the Overseas Development Administration budget. I do not wish to labour the point, but pledges that are known to the Department should be included in the Estimates. If good use is to be made of the special grant to the CDB, the West Indies must do some things for themselves and Britain must take some actions.
The annual report of the CDB reads:
There were difficulties in turning proposals into bankable projects. Borrowers often were not able to provide the required equity and security, and were reluctant to bear the foreign exchange risk. On the other hand, projects being implemented were adversely affected by such factors as inadequate management capability, poor marketing strategies, depressed commodity prices, poor internal cash generation and incapacity to meet operational costs and service debts. Tourism projects faced difficulties mainly because of low occupancy.
Efforts at alieviating the difficulties faced by the borrowing member countries included concessionary loans, increased amounts of technical assistance and training in areas of management, marketing and accounting.
This is a soft loan through the soft window of the CDB Therefore, it does not have to go into productive resources. I fear that the bank will use the loan for balance of payments support. If that happens, we shall not get the developmental value that we ought to get from money given to the bank.
If the money runs into the sand of general funds for each country, we will not get development that will lead to reductions in unemployment and increased foreign exchange earnings, which would enable the West Indies countries to pull themselves up by their own efforts.
The CDB annual report reveals that the Trinidad and Tobago production of sugar is a derisory 75,000 tonnes— less than the 85,000 tonnes production of the tiny island of Barbados. The cost of sugar production in Trinidad and Tobago is reputed to be over £1,000 per tonne.
The hon. Member for Vauxhall (Mr. Holland) said that there was no place for exports of sugar and other Caribbean products to go. But Trinidad and Tobago has a quota for sugar exports to the European Community, which it is unable to meet in quantity. In addition, the price is between £250 and £260 a tonne.

Mr. Stuart Holland: I did not refer to sugar or quotas. I was making a general macroeconomic argument on overall exports. However, the annual report of the bank makes it clear that many commodities showed declining production because of the decline in export demand.

Mr. Wells: The international sugar market is seriously depressed and is attracting a price of below £90 per tonne on the open market and there is no international sugar agreement. However, Trinidad and Tobago and the other Caribbean countries have a market, but they are not meeting their quota. That is a self-inflicted wound.
Trinidad and Tobago should be able to produce sugar at a lower cost. The quotas are not being met and therefore the Caribbean countries are not getting the valuable foreign exchange that they could otherwise receive. Indeed, in Jamaica the position is so serious that it is buying sugar on the world market at the depressed price of below £90 per tonne and selling it to the European Community at over £250 a tonne to gain the foreign exchange. That is a fraud on the people because they are not getting the employment that is generated by the production of sugar. It is also a fraud on the British and on the EC in the sense of buying in sugar which is specially kept by this country to provide employment and to provide for our exchange in those countries.
Reforms in sugar are necessary within the Caribbean, but there is another aspect. Under the agreement with the EC it is not possible to reallocate sugar production, should there be a shortfall for unforeseen reasons, such as weather conditions, from one country to another. Under the Commonwealth sugar agreement the sugar shortfall in Trinidad and Tobago could be absorbed by Barbados and, of course, by Guyana, Jamaica and Belize. That is how the Commonwealth sugar agreement used to work. That is not how the EC works. There is reallocation of resources not to the poorest countries but to some which are already rich in many respects. I particularly resent the allocation of sugar through ACP to the Ivory Coast recently and to India.
I should like to have the Minister's support in trying to ensure that the EC changes its regime so that sugar can be reallocated. The production of Guyana and Barbados has been maintained, although Guyana's has been declining in the past few years because it cannot afford the foreign exchange to buy the necessary inputs to maintain production. None the less, with the reallocation that I have suggested, they would be able to sell the whole of their production to the European Community at the preferential prices.
There are many things which can be done by ourselves and by the Caribbean countries in regard to trade, business and employment generation if we view the problems in the proper way.
In Britain, our banana marketing arrangements are specifically related to the Caribbean. The Caribbean Development bank has been assisting the production and reformation of the production of bananas in Jamaica, in Belize and throughout the Windward Islands. The


marketing of bananas from the Windward Islands and Jamaica is exclusively into Britain. Unfortunately, Jamaica has been letting itself down very seriously. Its production of bananas has declined from about 180,000 tonnes to a derisory amount of under 8,000 tonnes a year or so ago. That means that the quota for Jamaican bananas to be imported into Britain at preferential prices has not been met. It has meant that central American bananas—dollar bananas, as they are called—have been brought in to substitute for Jamaican bananas, to be sold on the British market. That is a fraud on the British who made the arrangement and on the EC which agreed to it. It is a denial of employment opportunities in Jamaica.
The reasons for the decline in Jamaican banana production are complicated. I shall not go into them now because it would take too long, but part of the money needs to go into the regeneration of the banana industry, which is also being supported by bilateral aid from my right hon. Friend's Department and from my good friends the Commonwealth Development Corporation. Jamaica must build up employment and get the foreign exchange that is necessary for it to develop and service its debts. Even if Jamaica gets some of the available money, it will have to be serviced at 3 per cent., as the Minister said. The loans will have to be serviced by the export of bananas.
This regime is now under threat by a review which has been conducted by the Ministry of Agriculture, Fisheries and Food and the Department of Trade and Industry, the report of which is imminent. The review was brought about by the failure of the Jamaica banana industry to fulfil the quota. If we want this type of loan to be helpful to the Caribbean and to produce development, it is essential that that banana marketing regime be maintained into Britain because it is a lifeline in that it provides the only opportunities for development in the Windward Islands.
It is extremely important to Jamaica, which is faced with a reduction in bauxite demand, especially with the recent sudden announcement of the withdrawal of one of the major aluminium and bauxite production companies in Jamaica.
I hope that the Minister will support me in making representations to the Department of Trade and Industry not to alter that regime, if we are serious about making this loan effective in developmental terms in the Caribbean.
Rice production in Guyana is also falling. It, too, is supported by loans from the Caribbean Development bank. The marketing of rice is done through a state-controlled board. Guyana is a perfect example of what the hon. Member for Vauxhall believes should be a pattern for development. Guyana's production and opportunities for employment are falling each year. One reason for that is the sort of regime which the hon. Member for Vauxhall supported, as did, I regret to say, the hon. Member for Monklands, West.
Rice production is decreasing because the Government will not give an adequate price for that commodity. Much of the country's rice production is being exported, not by the rice marketing board — and is not shown in the Guyana statistics — but is smuggled out. That is the degree to which agriculture is being penalised by a regime which has done nothing but impoverish the people of Guyana.
Moreover, because of the restrictions on imports and the high duty placed on imported food, rice producers are

changing to the production of vegetables so as to give ordinary foodstuffs to people in the border market in Georgetown, who cannot obtain flour—for the basic necessities of life, for bread and so on—from external sources. That is happening because of some of the policies which, I am afraid, the hon. Member for Vauxhall supports.
Because of the shortness of time, I shall not refer, as I would otherwise have done, to agricultural diversification, but will instead deal with tourism and airways finance.

Mr. Stuart Holland: I am looking forward to the probably brief contribution which the hon. Gentleman will make on those subjects. He may have persuaded the rest of the House about the way in which my arguments related to rice production in Guyana, but he has not persuaded me. If, apart from anything else, those in a country lack the foreign exchange to purchase goods from abroad, that may be a reflection on the difficulties created by an old model of the international division of labour, rather than simply on the incentive price. I agree with the hon. Gentleman that there must be a price for agricultural products sufficient to call forth supply.

Mr. Wells: With the means of production, distribution and exchange being in the hands of the Government of Guyana, to the extent of 86 per cent. of the total assets of that country, I should be glad to discuss in another debate the way in which that kind of Socialism has reduced many countries to the impoverishment level that we see in Guyana. This is not the occasion to do that.
Airways are crucial to the development of tourism. The lack of control over planes coming into and leaving an island is a matter of major concern to islands which are becoming increasingly dependent on tourism.
Barbados, which 20 years ago was 10 per cent. reliant on tourism for its gross domestic product, is now 50 per cent. reliant and likely to become more so because of the decline of the sugar industry. There has not been a fair reciprocal arrangement between the access of British carriers to the Caribbean and the access of Caribbean carriers to London. The Caribbean Development bank is crucial in providing the capital for the internal airline, LIAT, which feeds BWIA and British Airways services to Europe. If British Airways decides, as it does from time to time, to cut out one flight, it means a major reduction in the number of tourists coming into the islands of Antigua, St. Lucia, Barbados and Trinidad. There is nothing that the islands can do about that, unless they have the ability to replace that flight with one originating in the Caribbean—Trinidad or Barbados—which can fly to London and back again.
I have pressed my right hon. Friend the Secretary of State for Transport to offer reciprocal rights. I hope that my right hon. Friend the Minister will join me in trying to ensure that we conclude reciprocal agreements that are seen to be fair in the West Indies and that safeguard tourist arrivals in the islands. As the report said, Europeans stay longer and spend more. Despite increased American arrivals last year, the islands took no more in tourist receipts because of the fall in European arrivals.
The proposals for finance are especially important for the Jamaican and Guyanese governments to service any loans or grants. Jamaica is not fully covered by ECGD, which is making it extremely difficult for British exporters


to send goods to that country with any sure expectation of payment. Many companies are continuing without that cover, but it is a great inhibitor of investment in Jamaica. The Jamaicans are so short of foreign exchange that they cannot permit the servicing of capital either in dividend, interest or capital repayments, because they do not have the foreign exchange to do so.
The report and our bilateral aid to Jamiaca show that we are contributing considerable sums. So why do we not use that money to buy Jamaican dollars, thereby implementing our aid projects in Jamaica? Why do we not form a fund that would guarantee the repayment in sterling of loans, dividends and capital to British investors in that island? If we use money in that imaginative way, either through the Caribbean Development bank or through a bilateral fund, we could attract the necessary investment into Jamaica from the private and trading sectors. Whatever we say about aid, it will never be sufficient. The private sector and the engine of trade will provide the employment opportunities and the return of some prosperity for the West Indian islands.
I want to say a little about the Caribbean Development bank report, which I found disappointing. I could not tell from the report where the bank had been using the money. There is no list of projects, what the money has been invested in or the returns on the projects, either developmental or financial. There are lists in global terms which excite the imagination of the hon. Member for Vauxhall, but such dry statistics are indigestible to most of us. I urge the Minister, who is a member of the board of the Commonwealth Development bank, to insist on a more enlightening report.
Project identification expenditure is important. I have always rejected the idea that only Governments should suggest projects to the development bank. It is necessary for those expert in development to go to the countries concerned and to work out projects. Development projects do not grow on trees. They are not easily sold or found. They have to be worked out in detail.
It is also important to evaluate the way in which the CDB has been using money. It has been operating since 1970 and it should now be able to present to the public in the West Indies and the United Kingdom a list of projects in which it has invested and their developmental value and outturn. Perhaps lessons could be learnt from its mistakes and successes.
The CDB has a woeful dependence upon Government-to-Government lending. For that reason, I want it to examine the private sector which it supports to the extent of 26 per cent. I should like it to increase that percentage and to identify the projects which will produce employment, foreign exchange and other opportunities to enable West Indian Governments to get out of their difficulties.
I hope that the order will be approved, but I also hope that my hon. Friend the Minister will make it clear that we are making a real effort to help the Caribbean. When the Minister approved a further £1 million for development in Grenada, it was reported in only a column inch in the Barbados Advocate. That is an inadequate response in the Caribbean to the generosity of the Government, the House and the British public. We must project positively the way in which we support the Caribbean.
I hope that the Minister will also respond to the call in the Caribbean for more broadcasting, cultural visits from Britain and contacts of all kinds. Such contacts are yearned

for in the Caribbean. We should respond, and be sympathetic and helpful. I hope that the Minister will ensure that we receive recognition in the Caribbean for the generosity and support that the order represents.

Mr. Russell Johnston: I shall not delay the House long. We have already heard a number of comprehensive speeches and I do not believe in tedious repetition—nor do I believe much in staying up all night, but that is beside the point.
It is always a pleasure to follow the hon. Member for Hertford and Stortford (Mr. Wells) who made a well-informed speech to add to the excellent speech that he made on 17 July about Grenada. I do not dissent from the criticisms that the hon. Gentleman made of the effects of ideological policies in some of the Caribbean countries. But nevertheless, I support broadly the remarks by the hon. Member for Vauxhall (Mr. Holland) and by the hon. Member for Monklands, West (Mr. Clarke), because we are not doing enough.
I support the order, but there is a considerable gap between what we should be doing, not only in the Caribbean—as the hon. Member for Monklands, West mentioned—but generally and what we are doing in reality. As hon. Members have said, we have considerable direct historic responsibilities in the Caribbean. I still believe that aid can be a bulwark against political breakdown, but I shall not argue further with the hon. Member for Hertford and Stortford about whether the withdrawal of aid by the United States made any difference to the Bishop regime. I did not approve of that regime any more than the hon. Gentleman did. But the general proposition that aid can be very important in preventing such developments stands in its own right.
It has always been the firm view of the Liberal Bench that aid given through multilateral institutions is much more effective than tied aid. We welcome the trend apparent in the past year, which shows that Britain is now increasingly giving money through multilateral agencies instead of being the country which, of all the OECD countries, gives the most tied aid. That was the position last year when we debated the Brandt report, but I welcome the change.
The hon. Member for Vauxhall most effectively developed the point that we are not giving enough and that, furthermore, the amount that we give is declining. I believe that under this Government, it has declined by 20 per cent. as a proportion of Government expenditure. The hon. Members for Vauxhall and, I believe, for Monklands, West pointed out that our expenditure is how half—at 0·35 per cent. instead of 0·7 per cent. — the United Nations target.
The Caribbean Development bank is a multilateral agency which spends more than half of its money on the less developed countries. As the hon. Member for Vauxhall said, it has a crucial role to play in seeking to stabilise the Caribbean's monetary system. I refer to the crisis management role that he mentioned. Thus, it is exactly the sort of organisation that Britain should encourage.
This Bench welcomes the order and obviously there will not be a Division. Nevertheless, I support the view expressed by the hon. Member for Vauxhall in criticising the Minister for failing—unlike the hon. Members for Vauxhall and for Hertford and Stortford—to address


himself to the nature of the very pressing problems, and to how we can do more to help than we have done so far. Instead, at the beginning of his speech, the Minister gave a rather discursive, "Whitaker's Almanack" type outline of what the Caribbean Development bank does, and the meetings that took place before it was established.

Mr. Nigel Spearing: I am not sure that the House wholeheartedly welcomes the order. I am sure that it will not be opposed, but as the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston) said, it has received a qualified welcome. That is probably because, as the hon. Member for Hertford and Stortford (Mr. Wells) said, we are not quite clear about what the £6 million will be spent on. Indeed, as he said, we are not quite clear about what millions of pounds have been spent on in the past, despite the presence of one of the bank's governors. However, perhaps we shall hear a little more about that when the Minister replies to the debate.
The Overseas Development Committee has visited the Caribbean twice in the past two years. Members of the Committee, including myself, have twice had the benefit of talking to Mr. Demas, the chairman of the Caribbean Development bank, and have discussed the very real problems of development in the Caribbean. It may well be that some of those problems prevent the Caribbean Development bank from being as specific as some people would like.
I want to look at the context in which the bank has to operate within its charter and the territories to which it is assigned and at some of the problems that are endemic in the economic development of the Caribbean, which have not so far attracted the attention of the House. Before I do so, I emphasise and support the request of the hon. Member for Hertford and Stortford for a higher United Kingdom profile in the Caribbean. People who go to and from the Caribbean, not for holidays but to work—many constituencies in London and other parts of the country have people from the Caribbean—provide an important link. I do not sense the same degree of link between the Governments of those territories.
I want to concentrate on three dimensions within which the bank has to work. First, I want to deal with the process of development as a whole, with particular reference to Grenada. As the House will know, the Select Committee on Foreign Affairs, in House of Commons document 226, dealt with recent events in Grenada as well as with its economic development. Grenada is one of the territories in which the Caribbean Development bank operates.
The second important dimension within which the bank has to work is the rival political philosophies which are now on offer in the Caribbean and central America. Indeed, that was one of the themes of the Select Committee's report during the previous Parliament.
Thirdly, there are the lessons that might be learnt both by the Caribbean Development bank and by the Minister and his Department from what might briefly be called the Grenada affair. All those are relative to the objectives of the bank in raising the standard of living and increasing the security and prosperity of people in the Caribbean.
When we talk about development we sometimes think of different things. We may have ideas about great dams, irrigation works, or industrial development. But in the

Caribbean—as I am sure that the bank is well aware—I suspect that most people have a general desire for four elements in their lives. The first is almost certainly a patch of land on which they can grow at least a proportion of their food, and, ideally, export or sell a surplus of marketable produce. The second is to have community services—education, health and skill training—of the requisite calibre. That must be provided by society itself.
Thirdly, people want a measure of physical and economic security. They want security from arbitrary violence and arrest and a physical security in terms of income, food and shelter. We cannot expect people in Britain to understand that in a Caribbean island such security is by no means assured. Typhoons and cyclones can be physically threatening. There can be takeovers of Governments, the incursion of ruffian elements in any one island or other pressures that we are fortunately free of in Britain.
Fourthly—this applies to everybody else in the world—the people hope to see some improvement for their children so that they can at least maintain the standards that they have and, if those standards are insufficient, can see prospects of them being improved.
I suggest that those are the four aspects that most people in the Caribbean regard as development. It is to those things that the Caribbean Development bank should be directing its attention. Immediately, there are large problems in the Caribbean that are not found in other parts of the world. First, there is isolation. Communities are relatively isolated — 100,000 people here and 50,000 people somewhere else, connected by sea, with all the transport costs that that involves. Secondly, the technology that is available almost on tap in most large countries is not there. Inevitably, it has to be imported. Thirdly, the skills are not necessarily there either.
Even in this country there are complaints at the higher end of the technological scale that we do not have the necessary skills. Throughout the world, the technological triangle is acquiring a narrower base. Fewer people are involved, but the height of the technological scale is ever growing upwards. If that is a problem for the United Kingdom, one can imagine the problems of technological training and competence that are found in some of the Caribbean islands.
In the Select Committee report, paragraph 90 emphasises the role of private enterprise in providing the needs of the development process. Unfortunately, I was absent in my constituency on an urgent engagement or I would have voted against paragraph 90 or one of its successors. At least for Grenada, I am not confident that private enterprise or private capital as such can provide the answers to the problems about which we know, still less provide a balance of the four objectives that I outlined earlier. However, it is the duty of the Caribbean Development bank to provide just those things.

Mr. Bowen Wells: Will the hon. Gentleman accept that in Grenada, 62 per cent. of the agricultural land has been acquired by the state under both the Gairy and Bishop regimes, and land is the basis from which Grenada's prosperity can proceed? Since that acquisition, the production of bananas and spices such as nutmeg and the production of food for the markets in Grenada and for export to Trinidad, the market for cocoa and its production, have all fallen dramatically. It is only with the


return of that agricultural land to proper management in the private sector that Grenada can truly look forward to increased prosperity.

Mr. Spearing: If the hon. Gentleman had waited a little, he would have heard me come to some qualifications on private enterprise and capital. Perhaps I was wrong, but looking quickly at paragraph 90 it appeared that the Committee was more concerned with the non-agricultural type of private enterprise, the import capital in the broadest sense, rather than with the support of individual proprietors and cultivators.
It is no use just praising the merits of capital without making qualifications. The sloganising on this, either way, is not necessarily the way to produce the development that we all want to see. If one lets private capital run riot, uncontrolled and undirected, because of the circumstances that exist throughout the world, the powerful would become more powerful, the rich would become rich and the poor, poorer, and power and capital would be sucked in to the centre. That is a worldwide phenomenon. If a person gets richer, it is seen to be good because it is believed that the wealth he creates will trickle down to everyone in due course. That has been shown to be untrue.
There is a great defect in the Caribbean basin initiative—this has not yet been mentioned in the debate—promoted by President Reagan, and it is one about which the governors of the Caribbean Development bank must take a view. The evidence shows that that initiative falls on the negative side of what I have just said. It encourages some private enterprise in the Caribbean, but does it almost exclusively with a view to its being a satellite of the United States economy. It either provides outworkers where labour costs are low or it is highly selective, or it is arbitrary or it is for the convenience of capital within the United States.
I now come to the point raised by the hon. Member for Hertford and Stortford. Another way of promoting the development of private food production is with cooperatives of the right size with the right management, or with small peasant proprietors who have a collective marketing system, whether organised by the state or by relatively enlightened private enterprise under a firm such as Geest. The problem is that such people do not always have that sort of opportunity, and Grenada is a good example of that.
The hon. Gentleman will remember that during our visit there we visited a derelict factory that had been producing fruit juice. Grenada is overflowing—not with milk an honey — with beautiful vegetables and marvellous fruits and the seas surrounding it are filled with fish. It is not even necessary to take a boat out to catch fish. One need only walk off a beach into the sea with a net. Yet as far as we could gather it was not possible to get peasant proprietors or landowners—capitalists in a small way, but nevertheless modest people—to export some of that marvellous fruit juice. Nutmeg, which is another great export from that spice island, is piling up in warehouses.
A reason for that, especially regarding fruit, is that it is impossible to compete against the large scale plantation agriculture of Florida and Canada. In Caribbean hotels, instead of being served local produce, one can be given air-freighted fruit from Florida or California. That is an automatic result of capitalism, where the return on capital at its highest point is the be all and end all. If it is possible

to get a 6 per cent. return on capital through method A, where method A involves air freighting in fruit from Florida, or a 3 per cent. return on capital from method B, using locally grown fruit, the 6 per cent. method will win. It is as simple as that, and it happens time and time again in the Caribbean.
There are other problems. The hon. Gentleman mentioned bananas, for which there is an insatiable market in the United Kingdom.

Mr. Stuart Holland: Only for the skins!

Mr. Spearing: Yes indeed. Many bananas are exported from Grenada to this country. A second aspect which has not yet been mentioned today involves currency systems. The currency system, as distinct from the independence or otherwise of the country', can be as important as the political system. Some years ago Barbados switched from linking the Barbadian dollar to sterling to linking it with the United States dollar, especially because of the tourist trade. The results of the change are clear throughout Barbados. I do not blame its government if they did so with their eyes open, but Barbados has become oriented towards the United States in a way that would not have happened had its dollar remained linked to sterling.
Although Grenada is part of the east Caribbean dollar currency system, it is very much linked to Trinidad which, fortunately for Grenada, buys a great deal of its fruit and vegetables. Trinidad relies on Grenada in that way, and under that economic system some things that might happen in the Caribbean do not happen between those two countries.
The linking of currencies in the Caribbean makes a great difference to the way in which a country is oriented; but it has a special effect upon exports, especially of bananas, from the Caribbean to Britain. If the sterling rate decreases, the returns to farmers in the Windward Islands for their crops also decreases. We know what has happened to sterling recently. There could be great problems if one part of the Caribbean is oriented towards the United States, in currency and philosophical terms, and another part is oriented towards the United Kingdom, athough perhaps to a decreasing extent.
There are some political problems with the currrency system. Many people, including me, would say that the United States undoubtedly has an ecomomic dollar empire—a maritime empire stretching into the Caribbean and a long way into central and south America. One need only consider the airline routes from Miami to see from how far away people visit Miami for all sorts of purposes and to understand the importance of the dollar exchange rate with local currency.
We discovered a natural resistance in the British Caribbean to those trends, although the British Government have done little to resist them. The status of trade unions in the British Caribbean in maintaining a proper and just minimum return for labour is an important factor. However, that factor does not commend itself to those who favour Reagonomics or, indeed, the Caribbean basin initiative. There was some resistance in Grenada to American dollar imperialism; to the forefront of such resistance, supported by many in Grenada, was the well-organised trade union movement.
We have heard that the Caribbean Development bank is ambivalent towards tourism and believes that it is a


mixed blessing. The hon. Member for Hertford and Stortford mentioned the extent to which the economy of Barbados now depends upon tourism. I would not like the economy of Grenada to become dependent on tourism. The new airport will certainly open and big jets will land there. I understand that it may be opened by no less a person than President Reagan on 25 October—I wonder why that date was chosen? It may be called the Ronald Reagan airport. The airport's economic effects upon Grenada may not all be beneficial, because the juxtaposition of two sorts of economy which tourism brings can create social dangers, of which I am sure the governors of the Caribbean Development bank are well aware.
When the Select Committee was there I found to my consternation that the highest charge being made in an extremely luxurious beach hotel in Grenada was the equivalent of paying £500 a night for a room in Britain. In other words, if any hon. Member, a bus driver, a taxi driver or anyone else on average wages here was told that the overnight charge in some prestigious hotel in London was £500 he would adopt a certain attitude to the people paying that amount—or even if it was £100 a night, as I believe it is in some of them. We can absorb that because there are so few people able and willing to pay such a charge, but if on an island 10 per cent., 20 per cent. or 30 per cent. of the people walking around the place are paying such a proportion of the average man's take-home pay, such a place has a different economy and a different society, and I question how it is possible to maintain political stability in such a place. Therefore, I hope that in looking at tourism as a means of economic development— if it is development, and I have my doubts—our Governor will think twice about it.
The challenge to development in the Caribbean is a very complex, difficult and uphill task. That may be one of the reasons why the Caribbean Development bank's report is not very specific. But it has to meet the needs specifically, I suggest, of young people. I do not know whether there is a scheme providing loans to young people. I doubt whether that is possible. But the number of people who will be there in the future, especially on the island of Grenada, which is fecund in almost every respect, is very great. Therefore the calls on facilities for education, for health and above all for technical training are likely to be great.
When people see on videos what happens in the so-called developed world, they at once want to be part of it. They want to acquire the skills which apparently are necessary to enter this Eldorado of the screen. This is where the two rival systems on offer in the Caribbean immediately become apparent. Either one follows the United States dollar offer of which I hope the Caribbean Development bank is not too much a part, or one looks at the possibilities being offered by Havana and all stations east.
It is that dilemma which gave Maurice Bishop an almost impossible choice. He was a man who would be called an idealist. He had a very broad vision. We are told that he introduced very important reforms into Grenada. Above all, he gave young people some expectation and hope for the future. When he overcame the gangster style

Government which existed there beforehand, he got a great deal of support from a wide spectrum of people in that country.
For some time the flexibility of the constitution of Grenada enabled it to be a Marxist or semi-Marxist monarchy. But it was the difficulty that Maurice Bishop had with political ideologues which caused problems. Ideologues are those who necessarily run their beliefs to an extent beyond that which the evidence will support them. I should be out of order if I went too far in developing that theme, but it is clear that it was the differences between ideology or ideals moving slowly in the direction of democracy and government by consent and the pressures and constraints from elsewhere and the ideologues with whom he was assocated at some time that caused the explosion in Grenada which blew the Caribbean apart.
The British Caribbean was blown apart and the work of all of the agencies, including CARICOM and the Caribbean Development Bank, was hindered and set back perhaps five or 10 years. It is almost as though there was a political vulcanism which spread its ashes and fire throughout the Caribbean. We were lucky to escape. If the explosion had occurred in a more vulnerable part of the world, there could have been an eruption and a maelstrom of almost unimaginable proportions. The assassination of Maurice Bishop and his associates at St. George's on 19 October 1983 could have been the Sarajevo that resulted not in the lights of Europe going out but in the lights of the world going out.
When considering the developmental possibilities, I put it to the Minister that some difficult choices must be faced by the governors of the Caribbean Development Bank. They must bear in mind the needs and aspirations of the people of the Caribbean. I have had the privilege of meeting them two or three times. If we want a test of the efficacy of the development process, of the work of the bank and of the work of the ODA, we need look no further than that island in the sun.

Mr. Jeremy Corbyn: I shall be brief as much of the ground that I wanted to cover has been dealt with. We are considering an extremely poor region, the poverty of which derives considerably from the way in which it has been exploited by Europe and the United States over the past 300 years. The problems that people of the Caribbean face are a legacy of the colonial period. They have distorted economies, cultural problems that the British and other colonial powers left behind and continuing poverty and trade problems. We must ask whether these proposals for the Caribbean Development Bank do anything to increase the Caribbean's independence and the living standards of its people or whether they are designed to increase the influence and power of European and American private enterprise.
My hon. Friend the Member for Newham, South (Mr. Spearing) spoke at length about the effect of tourism on the region and how it tends to distort its economy and cultural life. I substantially agree with him. Anyone who has visited or spent time in the Caribbean—I used to live there — sees the effect of building large and expensive luxury hotels. The effect is the same as on the north coast of Jamaica, on Barbados or on Trinidad—barefoot children who have inadequate schooling, little prospect of employment and little prospect of good skilled


training running by the side of huge, shiny and expensive hotels which are owned for most part by European and American companies, serve mid-Atlantic food at best and do not in any way attempt to integrate into the culture of the region.
When I was last in the Caribbean I met an unemployed West Indian chef. He lived in one of the eastern Caribbean islands. I asked why he was unemployed when there were so many hotels around the Caribbean which were obviously crying out for chefs. He told me that he was not qualified in French cookery, so could not get a job in one of the big hotels because tourists want European and American-style food rather than Caribbean food. That exemplifies so much of what is wrong with the distorted developments in the Caribbean and with the Government's proposals and the attitude that they seek to impose on the Caribbean through the CDB.
The hon. Member for Hertford and Stortford (Mr. Wells) seeks to denigrate everything that the New Jewel Movement Government did in Grenada. I do not know why he takes that attitude, but he gives that Government no credit for achieving anything. The CDB annual report states:
Economic activity in Grenada, as measured by growth in the export sector, was undoubtedly sluggish during 1983.
Available figures indicate that banana exports fell by 5·0% below the 1982 level, from 9,303 tonnes to 8,839 tonnes. Earnings also followed the same pattern between 1982 and 1983: in 1982, total earnings from banana exports were estimated at $3·3 million, whereas in 1983 earnings were estimated at $3·2 million. On the other hand, the volume of nutmeg and mace exports rose by 16·1% from 2,377 tonnes in 1982 to 2,759 tonnes in 1983. However, nutmeg and mace export earnings increased marginally to $4·0 million as export prices fell by 13·3%. Cocoa exports rose from 2,096 tonnes in 1982 to 2,234 tonnes in 1983 but earnings decreased from $4·6 million to $4·1 million.
That exemplifies the problem of trade in the Caribbean. Until October 1983, the Government in Grenada were attempting to develop the economy for the people of the island. They were trying to develop home-grown industries, to create employment in local agriculture and to build intra-community trade within the Caribbean—something which the CDB claims to support.
Because of the manipulation of commodity prices, although the Government were able to increase spice production by large amounts, they lost money as commodity prices fell and were forced into the terrible downward spiral of increasing productivity in key sectors of the economy, yet still receiving lower returns.
The CDB continues to emphasise the need for investment in tourism, rather than the more suitable investment in agricultural co-operatives and the developments that the NJM Government were undertaking.

Mr. Bowen Wells: The nutmeg price was controlled by the marketing agreement between Grenada and the Soviet Union. The inadequacy of the price offered by the Soviet Union produced the results that the hon. Gentleman has described. The bank's annual report makes it clear that tourism represents only 3·7 per cent. of its investment.

Mr. Corbyn: It is unlikely that the Soviet Union was able to control the nutmeg price before the New Jewel Movement came to power. The Soviet Union agreed to purchase a large proportion of the nutmeg crop precisely because the British Government and many others were demonstrating economic hostility to the NJM Government. Therefore, the NJM Government were forced to seek new markets for their products. That

underlines my contention that poor countries in the Caribbean are deterred from developing independent economies and encouraged to develop economies that are subservient to the needs of Europe and the United States.
The CDB annual report also says:
Of major economic importance was the political upheaval which occurred towards the end of 1983. Public finances, already weak during the first nine months of 1983, deteriorated much further after October, 1983 partly because of the inability to halt some of the basic public sector investment projects already begun and partly because of the high wage bill of the public sector. The current account surplus which stood at $7·7 million in 1982, declined by $4·0 million during 1983.
That is a very strange way of saying that the CDB wants the Government of Grenada to cut their public expenditure significantly. But with what effect on the people of Grenada?
Since the invasion last October and since the Government of the NJM was thrown out of office and its leader assassinated, there has been an increase in unemployment, and, due to the public spending cuts, a cutting and a destruction of many of the social programmes instituted by the NJM Government during their period of office. [Interruption.] If Conservative Members want to see in Grenada the destruction of so many of the public services—that is what they wish to see in Britain—let them say so and not bury their views in the kinds of phrases used in the report to which I referred. That is the reality of what they are doing to the people of Grenada.
I should like to refer to the report in regard to the situation in Jamaica. Jamaica is a country that the Caribbean Development bank has applauded for its economic management. Indeed, the present Jamaican Government are frequently applauded by Conservative Members. It is monetarism in the sun. But if we go to Jamaica we can see what monetarism in the sun means in terms of unemployment, wasted opportunities for youth, and an economy that is developing for the benefit of the multinationals rather than the people of Jamaica.
The Caribbean Development bank order provides for a minimal amount of money compared with what is needed in the region. I hope that the Minister will tell us a little more about how the money is to be spent. Does he see the role of the Caribbean Development bank as financing and refinancing budget matters and loans, or is the bank seriously interested in development within the region? That is extremely unclear.
In the Caribbean we are seeing an attempt by the United States to increase its domination over the economies and the political life of the Caribbean. That is what is behind its contributions to the bank, because 27 per cent. of the bank's resources came initially from the United States. The figure may be higher in later years. We are seeing an attempt by the United States to increase its influence significantly in the region.
Should the Government of Nicaragua, as it has a Caribbean coast and a Caribbean population, wish to apply for membership of the CDB, what would be the attitude of the British Government? What would be the attitude of the United States Government? What would be the attitude of other Governments in the region?
In many senses, the achievements of the Government of Nicaragua represent a very good example of Third-world development — a significant decrease in unemployment, a significant increase in health care, and


the lowest illiteracy rate in Latin America, apart from Cuba, That, surely, is an example of the kind of development that is needed.

Mr. Stuart Holland: The hon. Member for Hertford and Stortford (Mr. Wells), who has been the sole representative of his party on the Conservative Back Benches throughout most of the debate, is mumbling from a sedentary position. As he is so articulate in other matters, perhaps he would like to make plain his views on the matter to which my hon. Friend referred. Indeed, perhaps my hon. Friend would like to ask the hon. Gentleman whether he has been to Nicaragua, or whether the Minister intends to go to Nicaragua.

Mr. Corbyn: I do not know whether the hon. Member for Hertford and Stortford has been to Nicaragua. Several Labour Members have taken the trouble to go there. I am sure that, if the hon. Gentleman were to go, he would find a country seething with enthusiasm for its own achievements and developments.

Mr. Bowen Wells: What I have been saying is that the vast increase in public expenditure in Nicaragua and Grenada and the decrease in unemployment are primarily due to very much increased military expenditure.

Mr. Stuart Holland: Nonsense.

Mr. Bowen Wells: Indeed, I have been to Nicaragua, and I found it to be a frightening dictatorship.

Mr. Corbyn: The hon. Gentleman must have been in Nicaragua prior to 1979, when there was a frightening dictatorship.

Mr. Bowen Wells: rose—

Mr. Corbyn: I had better get on.

Mr. Deputy Speaker: Order. There have been a number of brief interventions. I suggest that we get back to the debate.

Mr. Corbyn: During the period in office of the New Jewel Movement in Grenada and since 1979, while the Sandanistas have been leading the Government of National Reconstruction in Nicaragua, there has been overt and covert economic hostility to both those countries. What plans does the Minister for Overseas Development have to reconsider the low credit rating that is deliberately given to Nicaragua under the export credits guarantee scheme?
What attitude would the Minister have to increased exports from this country to Nicaragua, for example, of railway, transport and road-building equipment, which is desperately needed there? Or is the hostility of the British Government to Nicaragua such that they would be prepared to allow unemployment to increase in companies in Britain which manufacture that equipment by a blatant and obdurate refusal to grant credit facilities or aid to the Government of Nicaragua to allow them to purchase equipment manufactured in this country?
There could be nothing more obscene than people making railway and other equipment in Britain being thrown out of work while there is a desperate need for those goods in Nicaragua. But the British Government will not grant the necessary credit facilities to allow Nicaragua to purchase them from us. Alternatively, does the Minister

think that the bank would be prepared to facilitate such a loan should those countries apply to join the Caribbean Development bank?
I detect in the measure that we are discussing and in reports coming from Canute James, a journalist in the Caribbean, the strong hand of the United States operating in the Caribbean Development bank—a hand which is trying politically to redirect the region and to isolate those countries which had the temerity to oppose the invasion of Grenada, which are seeking peace in the Caribbean and which wish to follow an independent, non-aligned path. While I see the hand of the United States there, I see the British Government close behind, supporting everything that the Americans are trying to do.
The order should address itself to what the Caribbean Development bank claims to be in existence for— to improve agricultural self-sufficiency and intra-community trade in the Caribbean.
The overseas development statistics which are available from the Library show, among items of British aid in the region, that the
construction of associated private sector development, of a large holiday village, is now progressing well and completion is expected before the end of 1984.
That is taking place in the Turks and Caicos islands.
Budgetary aid is provided to Anguilla and the Turks and Caicos islands, but the former will no longer require this type of aid beyond the end of 1983. Financial aid in all territories was devoted to the provision of infrastructure to help develop local economies and, to a lesser extent, social needs.
I see an unfortunate obsession with the idea that the way to solve the economic problems of the Caribbean, as elsewhere, is to increase investment in the tourist industry—bearing in mind all the harm that that can do to the social and cultural life of a country—and to decrease investment in social programmes which provide for a more skilled population and greater development of the agricultural needs of the region.
The record of the British Government in overseas aid is nothing short of appalling and disastrous. While newpapers in this country—The Sun and other rags that support the Tory party — adopt their usual chauvinist role, there is tremendous concern about poverty in the Third world and the role that the British Government should be playing in assisting genuine independent development, rather than the sort of proposals that the Conservatives are putting forward.
I am sure that the House will be lenient with the Minister if he goes a little wider than his brief. I hope that he will make a clear statement that the levels of overseas aid should be dramatically increased. There would be tremendous support for that.
The Government appear to be more concerned with political domination of people's lives in the Caribbean, supporting the United States and spending money on the arms trade than putting money into useful matters such as social development programmes in the Caribbean. It is an extremely poor area of the world, but it has enormous potential for the development of agriculture and other natural resources. We should not even have to consider sending food aid. We should be promoting agricultural development and internal trade and supporting the Caribbean in its striving for independence rather than dependence upon the United States or Britain. I hope that the Government will recognise that—

Mr. Tom Clarke: My hon. Friend referred to food aid. The Government find it possible to give £2 million per family in aid to the Falklands, yet that is not food aid.

Mr. Corbyn: My hon. Friend has underlined the Government's attitude. The Government's expenditure on the Falklands is a bottomless and unnecessary pit, but they are not prepared to spend money on developing agriculture in many poor Third-world countries and they are not prepared to cut the arms bill. They are obsessed with the consequences of not continuing to pour money into the Falklands.
I hope that when the Minister replies he will take on board the points that I have made and recognise that the job of the Caribbean Development bank should be not budgetary manipulation or the refinancing of debt, in the way that the Jamaican Government want, but developing the internal economies of the Caribbean countries. I very much hope that the House will take that point later.

Mr. Tam Dalyell: My hon. Friends the Members for Islington, North (Mr. Corbyn) and for Monklands, West (Mr. Clarke) have given me a cue in this debate by referring to the Falklands. We are discussing a figure of £42·272 million and an addition of more than £6 million. I recently asked the Minister of State, Ministry of Defence whether he would make a statement on the progress of the contract with ITM Offshore Ltd. for a port in the Falklands and at what cost would the work be carried out. The construction and assembly of the Falklands port and storage system has been completed satisfactorily at a cost of £25 million—and that is just an intermediate port.
I shall be succinct. My hon. Friend the Member for Vauxhall (Mr. Holland) and other hon. Members spoke about the costs of rearmaments and arms in relation to the aid that we give to the Caribbean Development bank. Not only do we give ·3 million a day in the south Atlantic—and that is a Sunday Times figure—but some of us believe that there will be even greater expenditure in the immediate future.
I speak to the House with more earnestness and seriousness than I have done in 21 years. In the light of what has happened at Berne—and I speak quietly and gently to Ministers—we must carefully monitor exactly what is happening in the southern part of the western hemisphere. Do Ministers realise that the Condor missiles—

Mr. Deputy Speaker: Order. The hon. Gentleman knows that I am bound by the rules of the House. He must relate his remarks to the desirability or otherwise of increasing payments to the bank.

Mr. Stuart Holland: On a point of order, Mr. Deputy Speaker. Is not the Minister for Overseas Development responsible for certain expenditure in the Falkland Islands and therefore—

Mr. Deputy Speaker: Order. That is irrelevant. We are discussing an order. I know how strongly the hon. Member for Linlithgow (Mr. Dalyell) feels and how sincere he is. I am asking him to relate his remarks to the desirability or otherwise of making further payments to the Caribbean Development bank.

Mr. Holland: Further to the point of order, Mr. Deputy Speaker. Do you agree that in aid, as in economics, a concept of opportunity costs is involved? If one gives money to one project, one cannot—

Mr. Deputy Speaker: Order. That is not a point of order. I have given my advice to the hon. Member for Linlithgow. He must relate his remarks to the further payments dealt with in the order. I know that he will do that.

Mr. Dalyell: I take your advice, Mr. Deputy Speaker. I shall be brief.
We have to realise that expenditure on arms in the southern Atlantic will take away or reduce resources that we can give to the Caribbean. I shall confine my argument to three matters. Do the Government understand that amphibious night exercises by Argentina—

Mr. Deputy Speaker: Order. With respect to the hon. Gentleman, nothing in the order relates to amphibious exercises by Argentina. The hon. Gentleman must relate his remarks to the order.

Mr. Dalyell: My argument is related, in the sense that I am talking about extra expenditure which will be needed in the next two years because of what is happening. Other hon. Members have been allowed to make general statements about arms expenditure. I am making specific points about what has happened. The Minister may laugh but training activities are occurring at night at battalion strength.
Why are the West Germans and Italians supplying formidable naval weapons in trials in the Baltic? The TR 1700 submarines—

Mr. Deputy Speaker: Order. I do not want to instruct the hon. Member to resume his seat. I know how seriously he takes these matters. I also take them seriously, as does the House, but we must keep within the order. I have allowed generalisations, but the hon. Gentleman's specific remarks are out of order. I want to help the hon. Gentleman.

Mr. Corbyn: On a point of order, Mr. Deputy Speaker. Is it in order for my hon. Friend the Member for Linlithgow (Mr. Dalyell) to reflect upon comparative expenditure through the Caribbean Development bank and military—

Mr. Deputy Speaker: Order. I shall decide what is in order when I have heard the hon. Member for Linlithgow. I shall be as patient as I can, and I ask the House to be patient. It is for me to decide when the hon. Gentleman is in order.

Mr. Dalyell: I do not want to abuse the House. I do not think that I have ever abused it in that sense. I shall leave the matter at this— [Interruption.] Perhaps the Minister will make his remarks from a standing position.

Mr. Raison: It is not for me to usurp your role, Mr. Deputy Speaker, but by any standards the hon. Member for Linlithgow (Mr. Dalyell) is trying to drag irrelevant matters into the debate.

Mr. Dalyell: These matters are not irrelevant. The total of military expenditure has a considerable bearing on the amount that our country can spend on overseas aid. There is a direct correlation between the two. I am trying to warn colleagues about formidable and unpleasant weapons,


bought from our European partners and which the Foreign Office says it is monitoring. Shakespeare had a phrase for what is happening—"Now thrive the armourers." That is exactly what is happening. The Italians are busily selling Ofamelara mines — [HON. MEMBERS: "Oh no."] Our forces will, of course, be overstretched. Incidentally, hon. Members will not hear a word of criticism of our forces from me. They are under considerable strain at the moment—

Mr. Deputy Speaker: Order. The hon. Gentleman must not be diverted by interventions from Conservative Members. I have tried to get the hon. Gentleman to understand that he must relate his remarks to the order.

Mr. Dalyell: The expenditure that I am talking about several times exceeds this country's total aid budget. A country such as ours cannot provide both forms of expenditure. If our French friends sell flight simulators for Super Etendards to Argentina, Britain has to react. It has to concentrate more forces on the Falklands and has to obtain more sophisticated weapons. If that happens, where will the money come from for the Caribbean Development bank, or any other aid project?
The forces in the south Atlantic are in ever greater danger. That danger may come not from President Alfonsin himself but from an Argentine military that has not gone away — [HON. MEMBERS: "Get on with it."] Hon. Members may say that, but in a year's time, I hope that no one will turn round and say, "We weren't warned—

Mr. Deputy Speaker: Order. The hon. Gentleman should address his remarks to the Chair and he might then stay within the rules of order.

Mr. Dalyell: I do not want to abuse this debate, so I shall leave it at this. The situation in the southern part of Argentina is such that the civilian Government are not fully in control. They are an infant Government and are in considerable danger. The military have not gone away. However, they have been humiliated, and those who are humiliated are dangerous. Gadgetry has been given to humour those involved. Many of the forces have been sent away from Buenos Aires to Patagonia because of the risk of a coup.
Unless some negotiation takes place and the careful Swiss do their best, more and more military expenditure will be poured into the south Atlantic. That means less and less money to implement the order. That is my only point.

Mr. Stuart Holland: rose—

Mr. Deputy Speaker: Order. The hon Gentleman has already addressed the House. He cannot make another speech.

Mr. Raison: rose—

Mr. Laurie Pavitt: I apologise to the Minister for rising to my feet so late, but I have one or two comments to make. I shall not pursue the remarks of my hon. Friend the Member for Linlithgow (Mr. Dalyell) too far, as otherwise I should be out of order. The problem that the House faces is that inevitably the amount spent in one direction has an impact in another.
The order enables an extension of rural development for credit and thrift co-operative societies in the Caribbean, particularly in Jamaica and Trinidad. The Minister knows of my long-held interest in the development of a cooperative, grassroots, village-level approach to our overseas aid programme. It is the villagers and those who often obtain their living from an agrarian subsistence economy who need such aid. Thus, the order is welcome because it will enable the Caribbean banks to make a much stronger input and will help the credit and thrift cooperative societies to develop. Incidentally, there are some such societies in my constituency, as an offshoot from Jamaica.
Unless overseas aid is applied at that level, much of the infrastructure will not be able to sustain the continuing technological development which occurs at the top. There is a tendency for the Overseas Development Administration in Britain and the specialised agencies of the United Nations to put their strength behind high, rather than intermediate, technology. Intermediate technology—the village level bicycle approach to mechanisation—is far more important.
I welcome the order and urge the Minister in the assessment of projects that he has to make from time to time, to give priority to aid at the village, rather than the urban, level.

Mr. Raison: I want to concentrate on the points that have been made relating closely to the Caribbean Development bank. I hope that the House will understand if I do not pursue every aspect of this wide-ranging debate.
We support, through my Department, the intermediate technology development group. I fully realise that the appropriate scale is of great importance in development. The large scale has its role as well. One does not want to get too caught up in dogma, but I understand the point that the hon. Member for Brent, South (Mr. Pavitt) made.
The hon. Member for Vauxhall (Mr. Holland) ranged widely. It was a tour d'horizon. The horizons were not always close to the Caribbean. Therefore, I shall try to concentrate more specifically on those points which seem to me to relate to what we are talking about. He and other hon. Members were worried about whether the Caribbean Development bank would be diverted from the proper task of development by the economic problems that face the Caribbean and other parts of the world today.
The hon. Gentleman refered specifically to structural adjustment lending. That is not currently part of the bank's operation, nor is it proposed that it should be a major part. As he said, Mr. Seaga raised the point at the governors' meeting in May. The next stage will be for the CARICOM heads of Government to consider it and in due course it will have to be considered by the board of directors. I emphasise that it is not proposed that the SDF should be used for that purpose. After all, our debate today has been about SDF allocations. I stress that the money that I am asking the House to commit will be spent on development. I do not deny that there is a crisis management problem which has to be faced. My hon. Friend the Member for Hertford and Stortford (Mr. Wells) made that point.
If one looks at what the bank is doing in the region it can be seen that it is doing a development job. Twenty-two capital projects were approved for loan financing in 1983 compared with 25 in 1982. That is only a modest change. Notably, loan activity for pre-investment studies has


increased. Hon. Members have talked about the importance of investment. The distribution of resources has moved from infrastructure towards productive activity. Those are signs of preparation for future development rather than simply of crisis managemant. Some of the other adjustments made in the bank's operations, such as increased technical co-operation, are to meet problems which are essentially internal to the recipient countries.
Let me give one or two examples of the kind of thing that the Caribbean Development bank finances. Like other aid donors, the bank is involved in both capital projects and technical co-operation. The main sectors in which financial assistance is provided are agriculture, which has been rightly stressed in this debate, industrial manufacture, support for developing finance corporations, infrastructure, including communications, water and power supplies, housing and student loan schemes. It also gives some support for tourism, as we know.
I understand the point about tourism that has been made in the debate by more than one hon. Member. One has to think hard about the role of tourism in development, but it would be palpably absurd not to contemplate the development of the tourist industry in the Caribbean. It is uniquely well equipped to provide for tourism. Many people derive their income from working in the tourist industry and many other people enjoy themselves through it by going on holiday to the Caribbean, and there is nothing wrong with that. To move from a sensible acceptance of the fact that there can be too much tourism and things can go wrong because of that industry to a priggish or ideological opposition to any development of tourism would be a grave mistake.

Mr. Corbyn: I do not think that anybody is saying that there should not be tourism in the Caribbean. However, people are concerned about the form of ownership of the hotel chains, the effects of foreign ownership of the tourist industry, and the distortion that that can cause to economic and cultural development.

Mr. Raison: There is substantial foreign ownership of the tourist industry, but the fact remains that the industry is giving jobs and work to the people, and by and large confers benefits. The more tourism and hotels that can be developed by indigenous people in the Caribbean, as anywhere else, the more that we would be delighted. The work of the Caribbean Development bank in this sector should give assistance to the natives of the Caribbean countries in trying to promote development in tourism. We must not write off tourism. It is bound to be of enormous importance in the Caribbean, although I accept that it can produce socisl problems if it is mishandled or gets out of control.
I can give one or two specific examples of what is approved by the bank's board of directors. A loan of about $500,000 is being provided from the ordinary capital resources to assist in the refurbishment, upgrading and expansion of tea room beach front property in Antigua, to convert it into a 40-bedroomed hotel of an internationally acceptabel standard. In St. Kitts and Nevis, the board has approved a loan of $65,000 to help with the construction of a 5,000 sq ft factory in a newly established industrial estate. As some hon. Members will know, in Nevis there is a clear tourist potential, because it is a very attractive

place, but it is as well to have a balance in the economy, and this is an instance of the way that the CDB is trying to bring this about.
Another project, also in St. Kitts and Nevis, is a loan of $350,000 to be provided for relending to students wishing to pursue approved programmes of study at the post-secondary level. We can argue about student loans, but that is a contribution towards positive development and towards strengthening the educational opportunities that are available to young people in the Caribbean. In St. Vincent, there is a loan of about $1,500,000 for the expansion and upgrading of a distillery. Some might argue about that on other grounds, but again this is an example of how the bank is trying to improve ther productive capacity of the Caribbean region. These examples concern development. They are sensible things for the CDB to be involved in, and I therefore hope that the House will accept that in passing the order we shall be doing something that is manifestly useful.
My hon. Friend the Member for Hertford and Stortford made a speech that was full of his expert knowledge of the region. I shall not take up all his points now but will concentrate on one or two of them. One was about the working up and evaluation of projects. To a considerable extent, I understand that the bank already does this, but I am sure that it will take note of the proposals made by my hon. Friend. I shall ensure that our United Kingdom director does take note of that.
Another slightly different question was raised about Nicaragua by the hon. Members for Vauxhall and for Islington, North (Mr. Corbyn). The question of Nicaraguan membership has not arisen in bank circles, although it may have arisen in the House today. If it did arise, in current circumstances, Nicaragua would not be eligible. The regional members of the bank have decided that membership of CARICOM should be a pre-condition for membership of the bank. It is not the only development bank in the region. There is also the Inter-American Development bank, of which Nicaragua is a member.
Some points were raised about Grenada. As the House debated Grenada a few days ago, it would be wrong to get caught up in a general discussion about our aid programme for it. This is not the occasion to do that. However, there are other points I wish to touch on.
My hon. Friend the Member for Hertford and Stortford spoke about the Estimates, and I made a short intervention. The money to which he referred is a commitment. It is not expected to result in new disbursements until 1986 and beyond. That is the basic reason why it does not appear in the Estimates for the current financial year.
My hon. Friend also asked about the reallocation of sugar quotas. Under the European Community sugar protocol quotas which are not fully used can be reallocated in the year after the shortfall to other ACP countries or to India unless the country falling short of its quota can show force majeure. This reallocation is within the discretion of the European Commission, although member states may try to exert pressure in favour of their client producers. It is no secret that we try carefully to look after countries which have a long association with us as sugar producers.
The question of bananas was also raised. They are of real importance to the Caribbean economy. Britain has a firm commitment under Lomée to take all the Jamaican and Windward bananas of exportable quality. The quota of dollar area bananas to the United Kingdom is to make up


the difference between the supply from ACP countries and total demand, as estimated by a committee, including representatives of Caribbean producers. The Government are reviewing their general banana policy. My hon. Friends wish to participate in it.

Mr. Corbyn: I wish to refer not to the problem of banana skins but to the problem of the fruit as whole. The Minister mentioned that the agreement was to take all crops of exportable quality. One of the problems of many of the Caribbean islands is that the exportable quality is decided by the exporting companies, that is, Geest, Elders and Fyffes. That causes immense problems for small growers when in some cases up to 30 per cent. of their crops are rejected because of size. That causes a serious glut of bananas or the local market which cannot be sold.

Mr. Raison: The trouble is that the question of what is exportable is decided not by companies but by the customers. Evidence shows that customers prefer to buy bigger bananas. Those islands tend to produce smaller bananas. If the eastern Caribbean countries and Jamaica are to take full advantage of the opportunities available, which are guaranteed, they must produce the sort of banana that the British housewife wishes to buy. Hon. Members may say that they do not care what sort of bananas they eat but, with respect, the market facts must be considered. The corollary of the sympathetic view we have taken towards banana producers is that they must produce bananas which will meet market needs.
I repeat that, although discussions are continuing, we have no intention of impairing out capacity to fulfil our Lomée obligations, and we are working closely with our Caribbean friends in this matter.

Mr. Stuart Holland: I can see that there is a case for unzipping smaller bananas, especially if, as in my case,

one has small children who never finish bigger bananas anyway. But before we finish the debate on bananas, I trust that the Minister will address himself to my question whether he sees a case for extending soft loans into what amount to regional SDRs. Will he also address the arguments from the Opposition on the importance of economic recovery if the aid programme is to be effective?.

Mr. Raison: Am I meant to stand at the Dispatch Box and say that economic recovery is not important? I do not understand the hon. Gentleman's argument. Of course, we are trying to bring about economic recovery. I have tried to concentrate on the subject of the debate rather than have a general debate about every aspect of the aid programme. The Caribbean Development bank, to which I am asking the House to provide additional resources, is in the business of economic recovery. The function of the part of the bank that I have asked the House to support this afternoon relates especially to long-term development. Of course, there are crisis management jobs to be carried out, and we must also consider the IMF, but this is not the occasion for me to embark upon a long analysis of the IMF's activities. I believe that its work is of great value. The Government are sympathetic to what it is doing and have a good record of providing the resources that it needs to carry out its work. But that is not the subject of the debate. We are talking about development, and I hope that the House will recognise that the bank is a useful development activity by voting for the order.
I have covered what seem to me to be the most relevant points of this useful debate. It has continued for longer than some expected, but I do not cavil at that. The bank is doing a good job, and I hope that the House will support it.

Question put and agreed to.

Resolved,
That the draft Caribbean Development Bank (Further Payments) Order 1984, which was laid before this House on 9th July, be approved.

High Technology Exports

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

Mr. Paddy Ashdown: From bananas to microelectronics—some may think that that is going from the sublime to the "cor blimey".
I am grateful for the opportunity of raising in this Adjournment debate the problems of British high technology exporters, especially the case of Mr. Michael Hambly, and I thank the Minister for being here at this late hour on a Friday afternoon.
Mr. Hambly runs a small export company dealing in small computer products for export to Europe and the middle east. He tells me that for the past 18 months he has suffered from increased difficulty with the Department of Trade and Industry and opposition from Customs and Excise, which, as he said in a recent letter to me,
seem intent on enforcing the loosest possible regulations in the tightest possible way.
Mr. Hambly's experiences are not unique by any means. Judging from similar complaints that I have received from high technology exporters they are typical of the confusion that now reigns over high technology exports from Britain.
It might be instructive to the House if I read verbatim, and in the original pungent form, extracts from a letter of 31 May from Mr. Hambly relating his experiences in trying to get out of Britain a recent order for Belgium. He said:
When I telephoned your Office last week it was as a result of massive frustration. We had the previous week shipped via a company called Salters (UK) Ltd. to Belgium 20 video monitors and 8 disk drives manufactured by Commodore Business Machines. We had checked by telephone with the Department of Trade &amp; Industry that as far as they were concerned these goods did not need an export licence. Normally in a case like this I would apply for an export licence anyway since I find it always the safest way but bearing in mind that licences take normally two weeks to obtain and that my Belgium customer was desperate and needed the goods to complete an order, we shipped the product without.
Some days later we received a call from Salters who told us that the goods had been impounded by Customs who insisted that the monitors needed an export licence. Apparently at this stage another problem arose which at the time I was not aware of. Our Belgium customer had engaged the carriers and at the time had told them that he wanted them to collect a number of monitors. When we received his actual order he had in fact added, as he often does, other items; in this case 8 disk drives. We had packed the product up in plain brown boxes marked computer parts…(this is normal practice since boxes marked 'home computers' tend to get lost in shipping) but had filled the invoice out describing the products accurately. Salters (UK) had, however, mistakenly assumed that all boxes contained monitors and had filled their shipping documents out to read 28 monitors.
I telephoned the Customs officials at Ramsgate and had a lengthy conversation during which they insisted that the monitors required an export licence. They advised me I should contact the DTI.…This I did. After some discussion with him he agreed that the monitors were in fact not licensable and that I should pass this information to Customs and if there was any problem they were to telephone him. I telephoned Customs back with this information but at this point they informed me that they had opened all the packages and discovered the 8 disk drives undeclared on Salters original paperwork. I explained that was a simple mistake and described how I thought it had happened. I also pointed out that all of our invoices with the documents contained an accurate description of the boxes and no attempt had been made to hide anything. They…insisted that I should now speak to the DTI and get a ruling on the disk drives. By this time I had wasted almost a whole day on the telephone. I telephoned back to the DTI…who agreed that the legislation was

extremely vague and admitted to me that almost anything electrical could be classified as a computer product under the existing legislation. He advised me that in his opinion the disk drives were licensable and that I should apply for an export licence for them and that this would be forthcoming and that he foresaw no problems. I telephoned export licensing and asked them how quickly they could arrange the export licence for me. The young lady there was extremely helpful but then warned me that Customs were still likely to impound the goods if we only applied for a licence for the disk drives. She then pointed out that if I wished to have a licence for the monitors as well, suggesting it would be safer bearing in mind that no-one seemed 10 know exactly what was licensable and what was not, that I would also require a Certificate of Declaration from my Belgian importer. This was, of course, impossible given that the goods were already late in shipment and that a declaration would take at least 5/6 days to organise. I would then have to send this to the DTI and so on. In the end I decided after another telephone call to Mike Roach at the DTI that we would only license the disk drives. All the paperwork was completed and despatched that day.
It was in the middle of this mess that I telepohoned your office. What I haven't described since it would take a number of pages was the number of fruitless telephone calls I made to various faceless telephone voices who were neither interested in helping or interested in telling me where I could obtain help. I felt I was going around in circles. I do not blame the individuals; they are only the cogs in an enormous machine but one thing is certain; the machine is out of control.…In the meantime the goods would be held and no shipment would take place. It is now almost 3 weeks since my Belgium customer's original order and I feel certain I have lost his business for good. He was a regular customer purchasing between £5000 and £15000 worth of equipment per month. Not a lot perhaps by many people's standards but for a small export company like our own an important part of our turnover. I spend all yesterday afternoon until 5.30 pm trying to get sense from various Customs &amp; Excise officers but to no avail; I couldn't even discover to where the documents had been sent. No-one seemed to know or care. This morning I started my telephone calls at 10 am and by 10.30 am had got through to … General Customs B Branch 3.A. She listened patiently and was polite but as with all the others told me there was nothing she could do and again could not tell me where the documents might be.…However…she went away to get a telephone number for me and on returning informed me that she had discovered the documents had arrived that morning and were with one of her colleagues. MIRACULOUS. I then spent a frustrating 15 minutes trying to find out what would happen to the goods. She explained to me that a Customs officer at Ramsgate had decided that a misdemeanour may have taken place and had written a report to pass on to his superior for appraisal and recommending that the goods be impounded. His superior had read the report, added his own comments and recommended that the goods be impounded and had passed it to his superior for comment. His superior had read the report, added his comments, recommended the goods be impounded and posted it to the Department. She explained that she would now read the report, add her comments and pass it to her superior. She, also, explained that she had no authority to make any decision. I asked her what would happen once the report had been passed to her superior. To my absolute amazement she replied he will pass it to his superior with his recommendations and there I discovered it would finally stop. If this is not bureaucracy gone absolutely crazy I do not know what is.
A final note on this saga, after pleading with the lady at customs and Excise to try and sort something out she kindly returned my telephone call a little later and told me that her superior had given permission to release the monitors"—
which the DTI said originally would not require licences—
but not the disk drives. I must say that this would not have taken place had I not made such a fuss and told them I intended writing to you and to anyone else I felt could help…
Virtually every person I have spoken to in a Government department over the last 2 weeks has expressed some disquiet and dissatisfaction with the way the present rules work. It is obvious that the legislation is unwieldy, out of date and virtually unworkable in any sensible fashion…The frustration that I and many other exporters feel is growing daily. Something needs to be done and it needs to be done quickly. Technology marches much faster than the minds of bureaucrats.


I sent that letter to the Minister and, in reply, he conceded that there was, to use his words,
uncertainty about the export licensing position".
As an understatement, that is masterful. He said however, that this situation might be resolved once the United Kingdom had got agreement on the new COCOM arrangements governing high technology exports. Indeed, according to a parliamentary answer given to the hon. Member for Nottingham, South (Mr. Brandon-Bravo) last Friday, commenting on the new COCOM agreement, the Minister said that COCOM had now reached an agreement which was "satisfactory" to British interests.
I should now like to consider the details of the Minister's answer to the hon. Member for Nottingham, South, as it is clear that, far from being in the Minister's words "satisfactory", that answer was, at best, incomplete and, at worst, downright misleading.
In his answer, the Minister said that the COCOM arrangements
will require the formal assent in due course of the Governments concerned: This is expected in the autumn of this year. I hope shortly to make the necessary statutory instrument".
I understand, and I ask the Minister to confirm, that the new COCOM lists have the force of law, not in the autumn, but since 12 July under section 1 of Import, Export and Customs Powers (Defence) Act 1939, which is normally known as the Emergency Powers Act. What is true, however, is that the lists will not be published, or even publicly available until the autumn. I am also informed that those arrangements do not require parliamentary approval, as the Minister seems to imply but can be put into force on the signature of a senior civil servant.
The Minister's answer continues:
When the new arrangements are in force, low-powered computers of no strategic significance will be freed from export control".
This is simply not accurate. In fact, and I ask the Minister to confirm this. The United States has retained the de facto right to veto exports of any computer which has either networking facility, software development tools or virtual memory facility. That veto will, in fact, allow the imposition of controls on exports to all destinations on machines as simple and primitive as the Apple 2 and the ZX Spectrum — a far cry indeed from the Minister's comfortable assurances that low-powered personal computers will not be affected. In many ways we are back to the circumstances that applied before the COCOM arrangements. I understand, and again I ask the Minister to confirm, that in addition to these clawback provisions, the United States also refused to give assurances that it would not continue to use the extra-territorial provisions of the United States Export Administration Act, whenever United States designs or parts of designs, chips or parts of chips, or any other components or parts of components were incorporated. Since, as the Minister will know better than most, the high technology industry is highly international and almost all low-level United Kingdom produced goods contain such American produced items, all such items could still be subject to American blocks on export.
The Minister went on to say in his answer:
Certain strategic categories of software…will be brought under export control.

What he meant was that, in effect, almost all software exports made to any destination — and I mean any destination, including Belgium — could fall under the control provisions. I am informed that the definitions, which depend on a data processing rate of 15, of affected software are so loose that about 100,000 items of software could be licensable for export even to friendly European countries. I understand that the Minister's officials have frankly no idea either of how to define the software to which these provisions refer, or to control its export. How, for instance, will he enforce the control of export of software down telephone lines to other countries? We can envisage ordinary cassettes that contain low-level software being held up in customs, much as Mr. Hambly's VDUs were. Software relating, for example, to CADCAM facilities, in which Britain is a world leader, could be blocked. So could all software relating to artificial intelligence systems. Incidentally, a lot of artificial intelligence software in Britain is imported from Hungary, one of the very countries which we are trying to exclude from getting their hands on this technology. Nothing more clearly shows the ludicrous nature of the agreement that we have reached.
The Minister also said:
stored programme controlled telecommunications equipment…will be brought under export control".—[Official Report, 20 July 1984; Vol. 64, c. 371.]
Since stored programme facility includes the re-dial facility incorporated into even the most simple modern telephone handsets, what the Minister means is that the United States could use the COCOM agreement to insist on licensing procedures for almost all British Telecommunications equipment—right down to simple telephones—being exported to any country, including friendly and European countries.
Mr. Hambly's letter shows that utter confusion reigns over the procedures for exporting high technology and that the Customs and Excise and the Minister's own officials are as confused as everyone else. The new COCOM agreements are likely to compound confusion even further. At best, Customs and Excise and the Minister's officials will find them unworkable and will ignore them. At worst, the agreements will constitute a block on high technology exports from Britain, which will allow other nations, with more powerful industries and more strenuous Governments to support them, to move into our markets and clean up.
I ask the Minister for clear and detailed indications of what he will do to put right this mess. I also ask that the new COCOM arrangements should, in the light of their potentially damaging impact on Britain, be brought to the House for debate and approval early in the new Session.

The Minister for Trade (Mr. Paul Channon): The hon. Member for Yeovil (Mr. Ashdown) has secured another Adjournment debate on export controls. I know that the operation of security export controls and, in particular, their effect on small companies seeking to develop their export trade are matters in which he takes a keen interest.
The hon. Gentleman asked for the debate to deal with the case of Mr. M. L. Hambly, and he raised some wider issues. I shall be able to answer some of those points, and I shall get in touch with the hon. Gentleman about the matters that I cannot deal with today. It might be


appropriate to have a debate some time on the general issue, rather than to raise it as a side wind to the case of an unfortunate individual. The issues are important and need public debate, though not necessarily in the House.
I do not accept what the hon. Gentleman said about the future operation of COCOM. The new arrangements will be a great improvement. I hope to have time to say a few words about them, preferably today, but, if not, on another occasion.
I am grateful to the hon. Gentleman for having written to me in advance about Mr. Hambly's difficulties and giving me notice of his intention to seek the debate.
I should start with a few general points. The Government are anxious that the export licensing controls should operate as smoothly and with as little hindrance to trade as possible. Obviously, we have to achieve the purposes that lie behind the controls. Controls are necessary on exports of goods of strategic important significance, including computer equipment. That is not in dispute.
Perhaps I do not need to go into detail about the background to the controls, which I explained to the hon. Gentleman in a similar debate in April. Virtually the whole House accepts that controls are essential to ensure that the countries of the Western Alliance maintain their vital lead over the Soviet Union and its allies in strategic high technology equipment and know-how.
The Government realise the need for the lists of goods subject to control to be restricted to items of genuine strategic concern. That has been our objective in the recent review by COCOM member states of the lists of embargoed goods.
Since there is general agreement on the need for controls, we must apply them as fairly and efficiently as possible. That involves officials in my Department responsible for administering the export controls and Customs officials whose job is to enforce them at the ports. They operate under specific legal provisions — the Export of Goods (Control) Order 1981 and the Customs and Excise Management Act 1979. The order lists in a schedule the goods that are subject to control, and the Customs Act provides for controlling their actual export.
The Export of Goods (Control) Order is the legal authority on whether particular goods need a licence, and the onus of complying with the law rests ultimately, of course, on the exporter. I accept that descriptions of controlled goods are often detailed and need expert interpretation. The reason is that, by being as specific as possible, they help to ensure that items are not caught unnecessarily.
The export licensing staff in my Department are happy to give advice in individual cases, but from time to time they have to refer, if necessary, to technical experts elsewhere in the Department, especially the information technology division if we are dealing with electronic and communications equipment. Customs officials also have access to that advice. Indeed, we shall strengthen those resources so that advice can be given more fully to those who need this advisory service.
I understand Mr. Hambly's frustration and the reason which has led the hon. Gentleman to raise the case. I have to point out, however, that Mr. Hambly's problem is largely due to the unfortunate failure of his shipping agents to realise that the consignment in question, about which there has been all this excitement, included disk drives as well as video monitors. As a result, the contents of his

consignment were inaccurately described in the Customs documents. The video monitors in question are not subject to export licensing control, but the disk drives are.
The hon. Gentleman said that officials somehow appeared confused about the scope of the controls. My inquiries do not lead me to that conclusion. I think there may have been some misunderstanding in what was a rather confused situation. The staff in the export licensing branch know full well that disk drives need a licence, because they regularly deal with applications involving them, and I cannot believe that they would have advised otherwise. A member of the information technology division confirmed later to Mr. Hambly that disk drives were licensable. Mr. Hambly applied for a licence on 16 May and received it on 23 May—within five working days—so I must refute what the hon. Gentleman said about two weeks.

Mr. Ashdown: The Minister should recognise that the Customs and Excise stopped the consignment when they thought it was VDUs alone.

Mr. Channon: I shall come to that in a moment.
In such cases we normally require an international import certificate issued by the authorities of the importing country — in this case Belgium — before issuing the licence. That requirement was waived because of the low value of the consignment. There may have been some misunderstanding about the precise licensing position, which can arise when there are large volumes of telephone inquiries and the precise details of the proposed export are not to hand.
In the case to which the hon. Gentleman refers, on 15 May a form C273 export declaration and a Community transport document, form T2, were presented to Customs by Salters Freight UK Limited on behalf of Mr. Hambly's company, Computer Supermarket Holding Limited, for clearance of goods destined for Belgium. Form C273 described the goods as 22 packages of computer modules and form T2 described them as 22 packages of computer monitors.
The Customs officers called for invoices to clarify the export licensing position. Those revealed that the consignment contained computer disk drives in addition to the monitors. The forms were inaccurate. Then the Customs consulted the technical adviser at the Department of Trade and Industry, and he advised that, although the monitors did not require an export licence, the disk drives did, as they always do. So, in view of an apparently false declaration as to the nature of the goods—which is an offence under section 68 of the Customs and Excise Management Act 1979 — the goods were accordingly detained. That would seem to be perfectly natural to me.
On 26 May, the export licence for the disk drives and revised declarations were presented to Customs and the matter was reported to the headquarters of Customs for direction. The monitors were released on 31 May, but the disk drives continued to be detained while consideration was given to the seriousness of the company's action in attempting to export the goods without a licence and making a false declaration.
At Mr. Hambly's request, the disk drives were released on 13 June against a deposit of £200 until it could be decided what action, if any, was to be taken against the company. The Customs have now decided that action will be confined to sending a warning letter to the company


—there will be no prosecution—and a warning letter to the agents who presented the documentation and goods, and the £200 deposit will be returned.
Whatever may be the merits of the controls or the regulations which enforce them, it must remain the responsibility of Customs and Excise to enforce the law as it stands. I do not think that, in the circumstances of this case, the Customs could have done other than take the action that was taken, and a warning has been, or is about to be, sent to the company concerned. I hope that there will be no more false declarations in future and no more difficulties of that kind.
The hon. Gentleman is right on the wider issues—about the COCOM list and the need to update it—although I disagree with his interpretation. We have been trying to focus attention on goods that are strategically sensitive in terms of present-day technology and to prune the COCOM list of items which may have been sensitive in the past but which are now available in substantial quantities to the Soviet Union and its allies, and we have tried to take account of the rapid developments in computers.
Earlier this month, member states of COCOM reached agreement in principle on future export controls on computers, computer software and telecommunications switching equipment. The agreement concludes satisfactorily the COCOM review of the list of goods, the export of which is controlled for strategic reasons.
Once the arrangement has received the formal assent of the Governments concerned, which is expected in the autumn, I shall be in a position to implement the new controls in United Kingdom law. When these are enforced, low-powered computers of no strategic significance will be freed from export control and there will be substantial flexibility in the arrangements for controlling computers and related equipment of higher levels of performance.

Mr. Ashdown: I may have said certain things which took the Minister by surprise. He is almost reading out the press release to which I referred in my speech. I am interested in his remarks, but I should be grateful if he would answer the points that I made. Perhaps he would do that by letter, in view of the limited time available today.

Mr. Channon: I shall write to the hon. Gentleman, though I hope to answer now some of the points he made.
The law has not been changed with effect from 12 July; but it will be, once the final arrangements have been agreed in Paris. It will be done by way of statutory instrument in the normal way, signed by officials, as is the custom with many statutory instruments.
As for restrictions on minor telecommunications switching equipment, there are problems over the export of software. For that reason we have been at pains to get the controls confined to strategically sensitive software. The hon. Gentleman exaggerated the scope of the new controls on lower-powered computers, but I shall write to him in greater detail, because it is a technical matter and I would not wish to mislead him or the House. It is untrue

to say that all low-powered computers will be blocked. Nor will all software be blocked. Only software of strategic significance will be affected.
Earlier this year I wrote to the hon. Gentleman about Mr. Hambly's case. I agreed that what was said about computers in the current export order might not be sufficiently precise. I confirmed that although all disk drives were subject to licensing control, they were not specifically mentioned in the order because they fell within the description relating to certain specialised parts.
As a result of the recent agreement in COCOM, floppy disk and cartridge tape drives at the lower levels of performance will in future be free from export control. These exceptions will be set out in the new order which will be made to implement the results of the list review. All hard disk drives will continue to need an export licence.
I hope that the hon. Gentleman will agree that I have shown that Mr. Hambly's unhappy experiences were due to unfortunate misunderstandings of the export control arrangements. Those misunderstandings were based in part on the fact that the existing arrangements, as I fully acknowledge, are out of date. However, as I am sure the hon. Gentleman will recognise, to make changes in the COCOM regulations there must be unanimity and no Government can introduce a change without obtaining the unanimous agreement of its partners. That is what we have been striving to do in the recent COCOM talks.
I have looked at the answer that I gave recently and I hope that it was not inaccurate. If the hon. Gentleman thinks that a particular point was inaccurate, I should be glad to pursue it. It was generally thought by most people that the outcome of the negotiations represented a considerable success for the United Kingdom. I have not yet had the opportunity to do this, but I now place on public record my belief that the officials in the Department of Trade and Industry and their colleagues conducted the negotiations with extreme skill and deserve commendation not only from the Government and the House but from the industry on whose behalf they were trying to wage a battle to get rid of some of the unnecessary restrictions.
I hope and believe that the new arrangements will obviate the difficulties that someone such as Mr. Hambly has suffered. We have no wish to do down Mr. Hambly; we sympathise with those caught in a difficult position. However, with respect to Mr. Hambly, he might have handled the matter differently at certain stages of the sad story.
We shall do anything that we can to guide Mr. Hambly and many others in his position through the existing legal requirements. We accept that it is difficult for small business men, some of whom are not expert in these complicated and difficult matters. Indeed, when asked to explain the regulations in detail, we are dealing with a moving target and it is important to give an accurate answer—

The Question having been proposed after half-past Two o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eighteen minutes to Four o'clock.